To estimate the monthly maintenance cost for the maintenance department in a hospital, the following monthly costs areavailable:Monthly ExpenseSupervisor Salary ExpenseDepreciation Expense-Maintenance EquipmentRepairs Expense-Maintenance EquipmentSupplies ExpenseWages Expense-Maintenance Workers$10,000The Supervisor Salary Expense and the Depreciation Expense are fixed costs. The remaining expenses are variable costs. There are1,000 patient days in a month, which is the cost driver for maintenance costs. Estimate the cost function where Y is the monthlymaintenance cost and X is the variable cost per patient day.OY-58+$22XOY $30,000 $22.000xOY-$8,000-$22,000xOY-$8,000 $22X$5,000Costs$3,000$5,000$7,000

Answer : Cost driver = 1000 Patient days Fixed cost = Supervisor salary + Depreciation = $3000+$5000…

Maintenance Equipment tenance Equipment $5,000 $5,000 $7,000 stenance Workers $10,000 Expense and the Depreciation Expense are fixed costs. The remaining. a month, which is the cost driver for maintenance costs. Estimate the c X is the variable cost per patient day..

Maintenance Equipment tenance Equipment $5,000 $5,000 $7,000 stenance Workers $10,000 Expense and the Depreciation Expense are fixed costs. The remaining. a month, which is the cost driver for maintenance costs. Estimate the c X is the variable cost per patient day..

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit. Overhead expenses depend upon the nature of the business operations.

Question

To estimate the monthly maintenance cost for the maintenance department in a hospital, the following monthly costs are
available:
Monthly Expense
Supervisor Salary Expense
Depreciation Expense-Maintenance Equipment
Repairs Expense-Maintenance Equipment
Supplies Expense
Wages Expense-Maintenance Workers
$10,000
The Supervisor Salary Expense and the Depreciation Expense are fixed costs. The remaining expenses are variable costs. There are
1,000 patient days in a month, which is the cost driver for maintenance costs. Estimate the cost function where Y is the monthly
maintenance cost and X is the variable cost per patient day.
OY-58+$22X
OY $30,000 $22.000x
OY-$8,000-$22,000x
OY-$8,000 $22X
$5,000
Costs
$3,000
$5,000
$7,000

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