Draw a graph of the cost behavior for each of the following costs incurred by the Valley
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1. The cost of food varies in proportion to the number of patient days of activity. In January, the hospital provided 2,800 patient days of care, and food costs amounted to $22,400.
2. The cost of salaries and fringe benefits for the administrative staff totals $13,000 per month.
3. The hospital’s laboratory costs include two components:
(a) $40,000 per month for compensation of personnel and depreciation on equipment,
(b) $10 per patient day for chemicals and other materials used in performing the tests.
4. The cost of utilities depends on how many wards the hospital needs to use during a particular month. During months with activity under 2,000 patient days of care, two wards are used, resulting in utility costs of $9,000. During months with greater than 2,000 patient days of care, three wards are used, and utility costs total $14,000.
5. Many of the hospital’s nurses are part-time employees. As a result, the hours of nursing care provided can be easily adjusted to the amount required at any particular time. The cost of wages and fringe benefits for nurses is approximately $2,500 for each block of 200 patient days of care provided during a month. For example, nursing costs total $2,500 for 1 to 200 patient days, $5,000 for 201 to 400 patient days, $7,500 for 401 to 600 patient days, and so forth.
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Related Book For
Managerial Accounting Creating Value in a Dynamic Business Environment
ISBN: 978-0078025662
10th edition
Authors: Ronald Hilton, David Platt
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