Budgeting & Finance for Healthcare John Smart is the administrator of the cardia
ID: 2568324 • Letter: B
Question
Budgeting & Finance for Healthcare
John Smart is the administrator of the cardiac surgery service line. Consider the following costs for cardiac surgery over the relevant range of 5,000 to 8,000 hours of operating time :
Required:
Compute the missing amounts, assuming that cost behavior patterns remain unchanged within the relevant range of 5,000 to 8,000 hours. Use Excel or Google Sheets to show your work.
Hours of Operating Time
5,000
6,000
7,000
8,000
Total Costs
Variable Cost
$20,000
?
?
?
Fixed Costs
$168,000
?
?
?
Total Costs
$188,000
?
?
?
Cost Per hour
Variable Cost
?
?
?
?
Fixed Costs
?
?
?
?
Total Cost Per hour
?
?
?
?
Cost Behavior: Problem 2
Cost behaves in very predictable ways. Complete the following table which describes the behavior of cost as increases, decreases or remains the same. If you complete Problem 1 correctly you will have an opportunity to observe these predictable patterns.
AS ACTIVITY INCREASES
AS ACTIVITY DECREASES
Cost Behavior
Total Cost
Cost per Unit
Total Cost
Cost per unit
Variable
Fixed
Mixed
The administrator of Azalea Hills Hospital would like a cost formula linking the administrative costs involved in admitting patients to the number of patients admitted during a month. The Admitting Department’s costs and the number of patients admitted during the immediately preceding eight months are given in the following table:
Required:
1. Use the high-low method to estimate the fixed and variable components of admitting costs. Use Excel or Sheets to show your work.
2. Express the fixed and variable components of admitting costs as a cost formula in the form Y= a+ bX.
Cost Behavior: Problem 4
Hopeful Hospital processes its own laboratory specimens. The Vice President for support services wants to determine the fixed and variable components of services provided and decides to use the high low method and operating data from the past six months. Determine the variable cost and the fixed cost. Use Excel or Sheets to show your work.
Laboratory Costs
Specimens Processed
January
$ 1,710,000
450,000
February
$ 2,090,000
580,000
March
$ 1,632,000
405,000
April
$ 2,105,000
600,000
May
$ 1,900,000
520,000
June
$ 2,145,000
610,000
Required:
1. Use the high-low method to estimate the fixed and variable components of admitting costs. Use Excel or Sheets to show your work.
2. Express the fixed and variable components of admitting costs as a cost formula in the form Y= a+ bX.
Cost Behavior: Problem 5
The Cardiology Department has provided you with the following data in its annual report:
Month Number of EKGS Costs
January...................... 175 $3,000
February.................... 225 3,600
March......................... 275 4,300
April............................ 175 3,800
May............................ 200 2,700
June........................... 225 3,200
July............................ 300 4,250
August........................ 325 4,400
September................. 275 4,100
October...................... 200 3,150
November.................. 150 2,650
December.................. 175 2,750
1. Use the scattergraph method to determine the fixed and variable components of admitting costs. Use Excel or Sheets to show your work.
2. Use the sheet function to show the equation. Determine r2. Be sure to explain your findings in term of the fixed and variable cost. Interpret the r2.
Cost Behavior: Problem 6
1. The following information has been provided by the Pharmacy for the third quarter of the year:
Revenue
$1,300,000
Fixed cost
140,000
Variable cost
480,000
Fixed administrative expenses
120,000
Variable administrative expenses
80,000
Fixed selling expenses
60,000
Variable selling expense
150,000
Required:
What is the pharmacy’s contribution margin for the quarter? Use Excel or Sheets to show your work.
Cost Behavior: Problem 7
Determine Profit from Learning Disability Clinic Visits:
Average Price/Revenue Per Visit: $150
First Year’s Fixed Costs: $216,000 (clinical salaries, test kits, overhead)
Variable Cost: $5 per visit (based on each patient using two test booklets @ $2.50 per booklet)
Calculate: How much profit will the clinic make in the first year if they can schedule 10 patients per day (50 per week) for learning disabilities diagnostic work-ups?
Cost Behavior: Problem 8
Determine the missing amounts:
Use Excel or Sheets to show your work.
Row
Revenue per Unit
Unit Variable Costs
Contribution Margin per Unit
Contribution Margin Ratio
a
$ 250
$ 180
?
?
b
$ 500
?
$ 300
?
c
?
?
$ 330
30%
Cost Behavior: Problem 9
Cost Behavior: Problem 10
Determine Break Even from Learning Disability Clinic Visits:
Average Price/Revenue Per Visit: $150
First Year’s Fixed Costs: $216,000 (clinical salaries, test kits, overhead)
Variable Cost: $5 per visit (based on each patient using two test booklets @ $2.50 per booklet)
Calculate: How much profit will the clinic make in the first year if they can schedule 10 patients per day (50 per week) for learning disabilities diagnostic work-ups?
Breakeven Analysis: What is the minimum volume required for the clinic in the first year in order to break-even (i.e., where Profit=0)?
Cost Behavior: Problem 11
Case Study:
Your are the business administrator for the mother baby unit at Our Lady of Mercy Women’s Hospital. To encourage exclusive breastfeeding the state decides to reimburse hospitals for home visits by a lactation consultant. OLM hospital wants to consider participating in this state funded program and asks you to prepare the business case for the senior leadership. You decide to perform a CVP analysis with an executive summary. Your CVP graph is pictured below. The revenue is listed on the y-axis (vertical) and the visits are listed on the x-axis (horizontal). Total costs and total revenue is listed in the table in rows 2 and 3 respectively.
Hours of Operating Time
5,000
6,000
7,000
8,000
Total Costs
Variable Cost
$20,000
?
?
?
Fixed Costs
$168,000
?
?
?
Total Costs
$188,000
?
?
?
Cost Per hour
Variable Cost
?
?
?
?
Fixed Costs
?
?
?
?
Total Cost Per hour
?
?
?
?
Welcome to the Division of CARDIAC SURGERYExplanation / Answer
As per chegg guidelines we answer one question per post. But I have answered multiple questions. Kindly post remaining questions in next post Dear Student Thank you for using Chegg Please find below the answer and please give thumbs up Statementshowing Computations Paticulars 5000 hours 6000 hours 7000 hours 8000 hours Cost Behaviour problem 1 Total costs Variable costs = 4* No of hours 20,000.00 24,000.00 28,000.00 32,000.00 Fixed costs = Remains same at all level 168,000.00 168,000.00 168,000.00 168,000.00 Total costs 188,000.00 192,000.00 196,000.00 200,000.00 Cost per hour Variable costs - Remains same per hour 4.00 4.00 4.00 4.00 Fixed costs = 168000/ No of hours 33.60 28.00 24.00 21.00 Total cost per hour 37.60 32.00 28.00 25.00 Cost Behavior: Problem 2 AS ACTIVITY INCREASES AS ACTIVITY DECREASES Cost Behavior Total Cost Cost per Unit Total Cost Cost per unit Variable Increase Same Decrease Same Fixed Same Decrease Same Increase Mixed Increase Decrease Decrease Increase
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