Skip to content

CMA Intermediate · Cost Accounting · Operating Costing - Transport, Hotel and Healthcare

A hospital has 40 beds, operating 25 days in a month. Occupied patient-days were 800. Fixed ward costs are Rs 2,00,000 and variable costs are Rs 150 per occupied patient-day. The hospital wants to charge a price giving 20% profit on charge (sales). What is the charge per patient-day?

Cost per occupied patient-day is Rs 250 fixed (Rs 2,00,000 over 800 days) plus Rs 150 variable, totalling Rs 400. With profit at 20 percent of the charge, the charge equals Rs 400 divided by 0.80, which is Rs 500.

  1. ARs 500Correct
  2. BRs 450
  3. CRs 400
  4. DRs 520

Explanation

Fixed cost per patient-day = 2,00,000/800 = Rs 250. Total cost = 250 + 150 = Rs 400. Profit is 20% on charge, so charge = 400/0.80 = Rs 500. Rs 480 would result from adding 20% on cost; it is not an option and the wrong base is not used here.

Did you get it right without looking?

One question tells you little. A timed set on Operating Costing - Transport, Hotel and Healthcare shows your real accuracy, how long you take and where you lose marks.

Practise Operating Costing - Transport, Hotel and HealthcareFree diagnostic mock

More Operating Costing - Transport, Hotel and Healthcare questions