The Cardiac Care Department at St. Andrew€™s General Hospital has a capacity of 70 beds and operates 24 hours a day year-around. The measure of activity in the department is patient-days, where one patient-day represents one patient occupying a bed for one day. The average revenue per patient-day is $480 and the average variable cost per patient-day is $180. The fixed cost of the department (not including personnel costs) is $2,740,000. The only personnel directly employed by the Cardiac Care Department are aides, nurses, and supervising nurses. The hospital has minimum staffing requirements for the department based on total annual patient-days in Cardiac Care. Hospital requirements, beginning at the minimum expected level of activity, follow:

These staffing levels represent full-time equivalents, and it should be assumed that the Cardiac Care Department always employs only the minimum number of required full-time equivalent personnel. Average annual salaries for each class of employee are: aides, $36,000; nurses, $58,000; and supervising nurses, $76,000.

Required:
1. Compute the total fixed costs (including the salaries of aides, nurses, and supervising nurses) in the Cardiac Care Department for each level of activity shown above (i.e., total fixed costs at the 10,000€“12,000 patient-day level of activity, total fixed costs at the 12,001€“13,750 patient-day level of activity, etc.).
2. Compute the minimum number of patient-days required for the Cardiac Care Department to break even.
3. Determine the minimum number of patient-days required for the Cardiac Care Department to earn an annual €œprofit€ of $720,000.
(CPA,adapted)

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Annual Patient-Days Aides Nurses Supervising Nurses 10,000-12,000 12,001-13,750 13,751-16,500 16.501-18,250 18,251-20,750 20,751-23,000 15 15 16 16 17 18 3 , 10 10