Purchase Solution

Cost Accounting: A Breakeven Analysis for a Hospital

Not what you're looking for?

Ask Custom Question

Scenario: Murillo Medical Institute operates a 100-bed hospital and offers a number of specialized medical services. Murillo's hospital facility and equipment are leased on a long-term basis. The hospital charges $100 per patient day. On the basis of past cost data Murillo has estimated its variable costs as $45.70 per patient day. Fixed costs are $91,000 per month. The hospital's administrator has estimated that the hospital will average 2,300 patient days per month.

Questions:
A. How much will the hospital need to charge per patient day to break even at this level of activity?
B. Refer to the original date in the problem. How many patient days must Murillo average each month to earn a target profit or $45,000 per month?

Purchase this Solution
Solution Summary

Please help the following problems about cost accounting. Step by step calculations are provided.

Solution Preview

Questions:
A. How much will the hospital need to charge per patient day to break even at this level of activity?
B. Refer to the original date in the problem. How many patient days must Murillo average each month to earn a target ...

Solution provided by:
Gaurav Agarwal, MS
Education
  • BE, Bangalore University, India
  • MS, University of Wisconsin-Madison
Recent Feedback
  • "Your explanation to the answers were very helpful."
  • "What does 1 and 0 means in the repair column?"
  • "Went through all of the formulas, excellent work! This really helped me!"
  • "try others as well please"
  • "Thank you, this helped a lot. I was not sure how to plug in those numbers to a formula. This was a great help. Now I have to figure out how to explain cost of capital is used in net present value analysis, and how cost of capital is used in net present value analysis. This stuff gets confusing."
Purchase this Solution
Free BrainMass Quizzes
Introduction to Finance

This quiz test introductory finance topics.

Paradigms and Frameworks of Management Research

This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.

Transformational Leadership

This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.

Marketing Research and Forecasting

The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.

IPOs

This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)

View More Free Quizzes
Related BrainMass Solutions

  • Dealing with Cost Accounting

    551649 Dealing with Cost Accounting You recently read a newspaper article about how the majority of businesses fail in their very first year. To minimize the possibility of this happening to you, you decide to use a breakeven analysis.

  • Cost Concepts Healthcare Organization: Break even point

    Also, the cost per day for the hospital is greatly influenced by the number of patients that use the facility because of the large fixed costs of running a hospital.

  • Cost Analysis- Break Even Point

    207447 Break Even Analysis 1.

  • St. Martin Hospital Break Even Point

    Breakeven point in total revenue = Fixed cost/contribution margin ratio Fixed cost = $40 million Contribution margin ratio = 1- variable cost ratio = 1-20% = 0.8 Breakeven point in revenue = 40/.8 = $50 million 2.

  • Fixed Cost Analysis

    The solution performs a Fixed Cost Analysis for a not-for-profit acute care facility and computes projected P&L statement , breakeven point, required profit, agreeing on discount proposal decision.

  • Cost Volume Analysis & Strategy for Melford Hospital

    81447 Cost Volume Analysis & Strategy for Melford Hospital Provide a complete answer. Please see the attached file titled "7-3 Background Information" for background information.

  • Role provided by break-even point, major HMO, variances

    You are attempting to develop a break-even for a capitation contract with a major HMO. Your hospital has agreed to provide all inpatient hospital services for 10,000 covered lives.

  • Health Care Management Accounting: Break Even Target Profit

    537945 Accounting: P&L, Cost, Break Even Posted problems: 5.1 Consider the CVP graphs below for two providers operating in a fee-for-service environment: see attached file a.

  • Accounting:Cost-volume-profit analysis.

    The solution is presented in a Word document. The solution is clear and concise. Thank you. The problem set deal with issues in accounting: cost-volume-profit analysis.

View More Related Solutions