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St. Mark's Hospital contains 450 beds. The average occupancy rate is 80% per month. In other words, on average, 80% of the hospital's beds are occupied by patients. At this level of occupancy, the hospital's operating costs are 32 per occupied bed per day, assuming a 30 -day month. This 32 figure contains both variable and fixed cost elements. During June, the hospital's occupancy rate was only 60% . A total of 326,700 in operating cost was incurred during the month
(a) Using the high-low method, estimate: i. The variable cost per occupied bed on a daily basis. ii. The total fixed operating costs per month.

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khuranashilpa76

The variable cost per occupier bed on daily basis is $336,150.

High (450 x 30 x 80%) 10,800 10,800 x 32 $345,600

Low (450 x 30 x 60%) 8,100 8,100 x 32 $326,700

              Difference 2,700 $18,900

Variable Cost per Bed = $18,900 / 2,700 = $7

Total Fixed Cost = $326,700 - (8,100 beds x $7) = $270,000

For requirement no. 2, regardless of the changes in the occupancy rate, our total fixed costs will remain the same. Only the variable cost will change

Variable cost 450 x 30 x 70% x $7 $66,150

Fixed costs $270,000

Total operating cost $336,150

Accordingly, the total operating cost at 70% occupancy rate is $336,150.

Learn more about Hospital operating costs here:-https://brainly.com/question/16892317

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