The Pediatric Department at Wymont General Hospital has a capacity of 90 beds and operates 24hours...

Question:

The Pediatric Department at Wymont General Hospital has a capacity of 90 beds and operates 24hours a day every day. 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 $400 and the average variable cost per patient-day is$240. The fixed cost of the department (not including personnel costs) is $1,000,000. The only personnel directly employed by the Pediatric Department are aides, nurses, and supervising nurses. The hospital has minimum staffing requirements for the department based on total annual patient-days in Pediatrics. Hospital requirements, beginning at the minimum expected level of activity, follow: Nurses Aides 21 Supervising Nurses Annual Patient-Days 10,000-14,000 14,001--17,000 17,001-23,725 23,726-25,550 25,551-27,375 27,376-29,200 + tono These staffing levels represent full-time equivalents, and it should be assumed that the Pediatric Department always employs only the minimum number of required full-time equivalent personnel. Average annual salaries for each class of employee are: aides,$45,000; nurses, $60,000; and supervising nurses,$84,000. Required: 1. Compute the total fixed costs (including the salaries of aides, nurses, and supervising nurses) in the Pediatric Department for each level of activity shown above (i.e., total fixed costs at the 10,000–14,000 patient-day level of activity, total fixed costs at the 14,001-17,000 patient-day level of activity, etc.). 2. Compute the minimum number of patient-days required for the Pediatric Department to breakeven. (Hint: Divided total fixed costs in each level by unit contribution margin to see if the required B.E unit sales is in that patient-days range)

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