Southland Hospital bases its budgets on patient-visits. The hospital\'s static b

Question

Southland Hospital bases its budgets on patient-visits. The hospital's static budget for July appears below: Budgeted number of patient-visits 9,700 Budgeted variable overhead costs Supplies ( $6.20 per patient visit) $60,140 Laundry (0$5.9O per patient visit) 57.230 Total variable overhead cost H7.370 Budgeted fixed overhead costs: Wages and salaries 81.400 Occupancy costs 71.400 Total fixed overhead cost 152.800 Total budgeted overhead cost $270.170 Using the cost formulas above, compute what the total overhead cost should be at an activity level of 11.900 patient-visits per month $296,790 $270,170 $331,446

Explanation / Answer

Calculation of total overhead cost Budgeted variable overhead cost Supplies 11900X6.2 73780 Laundry 11900X5.9 70210 Total variable overhead cost (a) 143990 Budgeted fixed overhead cost wages and salaries 81400 occupancy cost 71400 Total Fixed overhead cost (b) 152800 total overhead cost (a+b) 296790

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