General accounting question Sunrise Healthcare Center (SHC) has a contract with an insuranceprovider covering 20,000 members. The insurance companyreimburses SHC on a fee-for-service basis at an average rate of $12,000per admission. Financial information for SHC is as follows:Average revenue per admission: $12,000 Average variable cost peradmission: $5,000 Direct fixed cost (overhead): $10,500,000Required:1. Calculate the break-even volume for SHC.2. If SHC served 2,200 patients last year from this insuranceprovider, calculate the degree of operating leverage at thisvolume.

Step 1: Definition of Break-even Volume and Degree of Operating LeverageBreak-even Volume: The…

Answered: Sunrise Healthcare Center (SHC) has a…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 4RE

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Bluegrass Community Hospital (BCH) has the following payer groups: Number of Admissions Average Revenue per Admission Variable Cost per Admission Commercial 1,000 $5,000 $3,000 BCBS 4,000 $4,500 $4,000 Medicare 8,000 $7,000 $2,500 Given: BCH annual fixed costs are $38M What is BCH’s net income? If half of the 100,000 covered lives in the Commercial group moved to a capitated rate and utilization and cost data remained the same, what PMPM rate should be charged to maintain the Commercial group net income share? What would BCH net income be if the Commercial capitated group admissions decreased by 10%? What would BCH net income be if the Commercial capitated group admissions decreased by 10% and variable costs for the Commercial capitated group decreased to $2,200?
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Methodist medical center solution this accounting questions
A company uses charging rates to allocate service department costs to the using departments. The accountant compiled the following information on one of the service departments: If Department K plans to use 1,350 hours of the service departments service in the coming year, how much of the service departments cost is allocated to Department K? a. 3,375 b. 27,300 c. 26,325 d. 23,950
Compute the total revenue
Claims Management Inc. provides claims processing services to several large health insurance providers. Customers who are covered by health insurance provided by one of Claims Management's partners submit their claims for health and dental services along with related documentation, and the employees at Claims Management compare their claims to the details of their benefit plans and calculate the value of the benefits owed. The company uses a predetermined variable overhead rate based on direct labour-hours. In the month of September, 15,000 claims were processed using 4,500 direct labour-hours. The company incurred a total of $4,950 in variable overhead costs. According to the company's standards, 0.25 direct labour-hours are required to process a claim, and the variable overhead rate is $1.20 per direct labour-hour. Required. 1-a. What variable overhead cost should have been incurred to process the 15,000 claims? Standard variable overhead cost 1-b. How much does this differ from the…
Toren Inc. employs one person to run its solar management company. The employees gross income for the month of May is $6,000. Payroll for the month of May is as follows: FICA Social Security tax rate at 6.2%, FICA Medicare tax rate at 1.45%, federal income tax of $400, state income tax of $75, health-care insurance premium of $200, and union dues of $50. The employee is responsible for covering 30% of his or her health insurance premium. A. Record the journal entry to recognize employee payroll for the month of May, dated May 31, 2017. B. Record remittance of the employees salary with cash on June 1.
SorCo. Inc. has just entered into a sale agreement with a customer. The contract is for $600,000. However, the payments will be made as follows: 1 August 20X1 on date of delivery $400,000; 1 August 20X2 $100,000 and 1 August 20X3 $100,000. SorCo has estimated that the interest rate required for this customer is 8%. SorCo follows IFRS. Required: Prepare the journal entry required to record the sale on 1 August 20X1 and the receipt of cash on 1 August 20X2 and 20X3. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations and round your final answers to the nearest whole dollar.)
Fairview Clinic buys $620,000 in medical supplies each year (at gross prices) from its major supplier, Consolidated Supplies, which offers the clinic terms of 6/10, net 30. What is Fairview Clinic's costly trade credit? (365 days in a year) A. $13,194 B. $39,583 C. $32,986 D. $26,389 E. $22,431
Veras Bus Transportation provides on-campus bus services for universities. On January 1, it enters into a one-year contract with Moose University to operate five bus lines traveling throughout the campus. Under the contract, Veras will be paid $110,000 on the last day of each month. In addition, Veras will receive an additional $130,000 at the end of each six-month period, provided it remains free of accidents. On January 1, based on historical experience, Veras estimated that there is a 70% chance that it will remain free of accidents for the entire year. On March 20, three of the most senior drivers at Veras abruptly left. As a result, Veras had to hire inexperienced drivers to fill the vacant positions. Consequently, Veras revised its estimate to a 30% chance that it would be entitled to receive the semiannual bonus and decided to continue this 30% probability estimate until its six-month review at the end of June. On June 30, Moose confirmed that there was no accident between…
HomeLife Life Insurance Company has two service departments (actuarial and premium rating) and two production departments (advertising and sales). The distribution of each service department's efforts (in percentages) to the other departments is shown in the following table: From Actuarial Premium To Premium Rating 70% Actuarial 20% The direct operating costs of the departments (including both variable and fixed costs) are: Actuarial $ 81,000 Premium rating Advertising Sales 16,000 61,000 41,000 Advertising sales, 15% 20 15% 60 Required: 1. Determine the total costs of the advertising and sales departments after using the direct method of allocation. 2. Determine the total costs of the advertising and sales departments after using the step method of allocation. 3. Determine the total costs of the advertising and sales departments after using the reciprocal method of allocation.

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