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ACCA Applied Knowledge · Management Accounting · Cost accounting methods

A hospital ward has 20 beds. It is open 30 days in a month and the occupancy rate was 80%. Total ward costs were $57,600. What is the cost per occupied bed-day?

The cost per occupied bed-day is $120. Available bed-days are 600, occupancy of 80% gives 480 occupied bed-days, and dividing the $57,600 total cost by 480 produces $120.

  1. A$120Correct
  2. B$96
  3. C$150
  4. D$2,880

Explanation

Available bed-days = 20 x 30 = 600. Occupied = 600 x 80% = 480. Cost per occupied bed-day = 57,600 / 480 = $120. $96 is cost per available bed-day (57,600/600) giving the wrong base is not right; $150 would come from dividing by 384.

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