Everymans Hospital relies heavily on cost data to keep its pricing structures in line with those of
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Equipment usage ...... $180 per day (average)
Doctors care ....... 2 hours per day @ $360 per hour (actual)
Special nursing care .... 4 hours per day @ $85 per hour (actual)
Regular nursing care .... 24 hours per day @ $28 per hour (average)
Medications ....... $240 per day (average)
Medical supplies ...... $150 per day (average)
Room rental ....... $350 per day (average)
Food and services ..... $140 per day (average)
The hospital director has asked the controller to compare the current billing procedure with one that uses industry averages to determine the billing per patient day.
Required
1. Compute the cost per patient per day.
2. Compute the billing per patient day using the hospitals existing markup rate. (Round to the nearest dollar.)
3. Compute the billing per patient day using the following industry averages for markup rates:
4. on your findings in requirements 2 and 3, which billing procedure would you recommend?Why?
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Related Book For
Principles of Accounting
ISBN: 978-1133626985
12th edition
Authors: Belverd E. Needles, Marian Powers and Susan V. Crosson
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