# Assignment: Case 3-1 Lakeside Hospital

Submitted By shawnyknoxville
Words 494
Pages 2
Name: Shawnyknoxville
Class: HADM 542 W13 MANAGERIAL ACCT/HTH CARE ORG
Date: 1/29/2013
Assignment: Case 3-1 Lakeside Hospital

For Case 3-1: answer questions 1 - 5.

1.
Breakeven Volume Analysis
Varible costs
Medical Supplies: \$493,806
Purchased Laboratory Services: \$24,476
Water Usage: \$20,896
Total Variable Costs: \$539,178
Number of treatments: 5,736 Total Variable Cost / Number of treatments
\$539,178 / 5,736 = 94

Px = a + bx
\$250x = \$510,870 + 94x
\$156x = \$510,870
(\$156x = \$510,870)/\$156 = 3274.81
3274.81 treatments per year 7 nurses -1 \$35,000/7 = \$5,000 bi-monthly / 2 = \$2,500 monthly (\$2,500 monthly)12 = \$30,000 per year 7 techs -1 \$30,680/7 = \$4382.86 bi-monthly(2 Employees)/ 2 = \$4382.86 monthly (\$4382.86 monthly)12 = \$52,594.29 per year \$30,000 per year + \$52,594.29 per year = \$82,594.29 per year total payroll last year = \$436,800 \$436,800 - \$82,594.29 = \$354,205,71 projected payroll with 3 less employees \$354,205.71/\$436,800 = 81.1% of previous years payroll expenses

Assumptions:
Medical Supplies: \$493,806
Purchased Laboratory Services: \$24,476
Water Usage: \$20,896
Are variable expensed and Depreciation is a fixed expense

2.
Fair Share of Overhead:
@ 50% Capasity
120 Treatments per week / 2 = 60 Treatments per week
(60 Treatments per week)(52 weeks in a year) =
3120 Treatments per year @ 50% Capacity
Treatments per year @ 50% Capacity / Number of treatments last year: 5,736 = 3,120/5,736 = 54.4% Fixed Overhead; Depreciation, Operation of Plant, Housekeeping \$4,778 + \$4,281 + \$3,411 = \$12,470 Variable per treatment: Laundry and Linens, Dietary, Physician Salaries, Medical Supplies, Pharmacy, Social Services, Intern and Resident Services \$1,782 + \$9471 + \$65,477 + \$279 + \$1,827 + \$50,878 + \$10,425 = \$140,139 \$140,139(.544) = \$76,235.62 adjusted Variable overhead by

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