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Question

A hospital has the following cost and utilization information 


Overhead cost:  Maintenance

costs: $250,000

Cost centers:  Ward: $50,000; Coronary care Unit $100,000 

Utilization;  Ward treats 100 patients; Coronary care unit treats 50 patients


What is the average cost of the Ward and Coronary care unit, ignoring overhead costs?


If you were to allocate overhead costs to the Ward and the coronary care unit, what share would you allocate to each? Explain.


If the Ward has 2,000 square feet of space and the coronary care unit at 10,000 square feet, calculate average costs for each unit including the appropriate allocation of overhead costs to each.

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Overhead cost:Maintenance costs: $250,000 Cost centers:Ward: $50,000; Coronary care Unit... View the full answer

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