Problem 3.

29 1 Costs Classification

Patient Days 4,200 4,500 107.143% --> increasing from 4.200 patient days
4.200 Patient 4.500 Patient
% Increasing Costs Type
Days Days
Salaries $ 55,000 $ 55,000 100.000% Fixed
Aides 32,000 32,000 100.000% Fixed
Pharmacy 235,700 251,300 106.619% Mixed
Laboratory 120,300 127,200 105.736% Mixed
Depreciation 25,000 25,000 100.000% Fixed
Laundry 20,160 21,600 107.143% Variable total variable cost increases in direct proportion to
increases in the number of activity driver.

Administraiotn 27,000 27,000 100.000% Fixed

Lease (equipment) 36,000 36,000 100.000% Fixed
Total Costs $ 551,160 $ 575,100
Charge per patient day $ 131.23 $ 127.80

2 Mixed costs separation using high-low method

4.200 Patient 4.500 Patient

Independent Days Days Fixed
Variable Cost
Variable Variable
Cost Cost
Pharmacy 52 $ 218,400 $ 234,000 $ 17,300
Laboratory 23 $ 96,600 $ 103,500 $ 23,700
 3 Calculation of 4.300 patient days
Problem 3.29
Patient Days 4,300 102% --> increasing from 4.200 patient days
4.300 Patient Fixed
Costs Type Variable Costs % %
Days Costs
1 2 3 2:1 3:1
Salaries $ 55,000 Fixed $ 55,000
Aides 32,000 Fixed $ 32,000
Pharmacy 240,900 Mixed $ 223,600 $ 17,300 93% 7%
Laboratory 122,600 Mixed $ 98,900 $ 23,700 81% 19%
Depreciation 25,000 Fixed 25,000
Laundry 20,640 Variable 20,640
Administraiotn 27,000 Fixed 27,000
Lease (equipment) 36,000 Fixed 36,000
Total Costs $ 559,140 $ 343,140 $ 216,000
Charge per patient day $ 130.03 $ 79.80 $ 50.23

4 Calculation of 4.800 patient days

Patient Days 4,800 114% --> increasing from 4.200 patient days
4.800 Patient
Days
Salaries $ 55,000
Aides 32,000
Pharmacy 266,900
Laboratory 134,100
Depreciation 25,000
Laundry 23,040
Administraiotn 27,000
Lease (equipment) 36,000
Total Costs $ 599,040
Charge per patient day $ 124.80

The charge per patient day went down because the fixed cost, which stays the same, is spread out over a greater
number of units.