2.​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     A. . What is the average cost of the Ward and Coronary care unit, ignoring overhea

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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2.​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

 

 

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

 

 

 

 

 

 

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

 

 

 

 

 

 

C.  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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