Daughters of Charity Hospital draws its nursing staff from members of its religious order. The nurses do not get paid a salary. Instead, they receive free room and board and a living allowance. The total cost to the hospital is about 60% of the approximately $10 million it would have to pay in salary and benefits in the open market.
In addition, the hospital benefits from the services of ‘‘candy stripers’’ and other volunteers, who staff the hospital’s gift shop, carry meals to patients, and perform a variety of other important functions. Were it not for these volunteers, the hospital would have to hire additional personnel to carry out many of their duties. The approximate cost to do so would be $400,000.
1. How much should the hospital recognize as revenue from contributed services?
2. How do you distinguish between the services of the nurses and those of the candy stripers?

  • CreatedApril 29, 2015
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