Assignment week 4 - Copy

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Keiser University *

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FIN3373

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Accounting

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Apr 3, 2024

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1 Assignment week 4 Financial Healthcare November 19, 2023
2 Chapter 6: Problem 6.1 a) What is the value of the cost pool? The cost pool is: $100 000.00 b) The allocation rate using the patient service revenue as the cost driver: Allocation rate = 100000/5000000 => Allocation rate = $0.02 per patient service The allocation rate using hours of housekeeping services as the cost driver: Allocation rate = 100000/5000 => Allocation rate = $20.00 Per housekeeping hour. Chapter 6: Problem 6.7 a) The appropriate allocation rates are: General administration allocation rate= General administration cost/Patient service revenue => General administration allocation rate = 4000000/63000000 => General administration allocation rate = $0.0635 per dollar of patient revenue. Maintenance expense allocation rate = Maintenance expense cost/space utilization => Maintenance expense allocation rate = 5000000/805000 => Maintenance expense allocation rate= $6.2111 Per Square feet Employee benefits administration allocation rate = employee benefits cost/number of full time – time employees => Employee benefits administration allocation rate= 4000000/1590 => Employee benefits administration allocation rate= $2515.72 Per full-time employee
3 Chapter 7 Problem 7.1: a) At breakeven point Total contribution = Total fixed cost If X= Per visit price for breakeven => Total contribution = Total fixed cost => 10000 * (X-5) = 500000 + 50000 => 10000X – 50000 = 550000 => 10000X = 600000 => X= $60.00 For a desired profit of $100 000.00 Total contribution=Total fixed cost + desired profit 10000 * (X-5) = (500000+50000) +100000 => 10000X – 50000 = 650000 => 10000X = 700000 => X=$70 b) Assuming the variable cost per visit is $10.00 Total contribution=Total fixed cost => 10000 * (X-10) = 500000 + 50000 => 10000X – 100000 = 550000 => 10000X = 650000 => X = $65.00 For a desired profit of $100 000.00 Total contribution=Total fixed cost + desired profit
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4 10000 * (X-10) = (500000+50000) +100000 => 10000X – 100000 = 650000 => 10000X = 750000 => X=$75 7.4   Revenue variable cost Income ( Revenue - Variable cost) Commercial 1000 * 5000 = 5 000 000.00 1000 * 3000 = 3 000 000.00 2 000 000.00 Penncare 4000 * 4500 = 18 000 000.00 4000 * 4000 = 16 000 000.00 2 000 000.00 Medicare 8000 * 7000 = 56 000 000.00 8000 * 2500 = 20 000 000.00 36 000 000.00 Total contribution margin 40 000 000.00 Less fixed cost 38 000 000.00 Net income 2 000 000.00