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CA Intermediate · Cost and Management Accounting · Service Costing

Sunrise Hospital runs a 50-bed ward. Monthly costs: nursing staff Rs 6,00,000, ward consumables Rs 1,50,000, depreciation Rs 2,25,000, and allocated administration Rs 1,25,000. Occupancy is 80% for a 30-day month. In addition, the hospital wants a charge that earns a profit of 20% on the charge itself (i.e. profit is 20% of the selling price). What is the charge per patient-day?

Total cost is Rs 11,00,000 over 1,200 patient-days, giving Rs 916.67 per day. With profit at 20% of the charge, the charge is 916.67 divided by 0.80, which equals about Rs 1,145.83.

  1. ARs 1,250
  2. BRs 1,198
  3. CRs 1,000
  4. DRs 1,563Correct

Explanation

Total cost = 6,00,000 + 1,50,000 + 2,25,000 + 1,25,000 = Rs 11,00,000. Patient-days = 50 x 30 x 80% = 1,200. Cost per patient-day = 11,00,000/1,200 = Rs 916.67. Charge with profit 20% on price = 916.67 / 0.80 = Rs 1,145.83. This does not match options 1-3 as listed, so recheck: costs sum to 6,00,000+1,50,000=7,50,000; +2,25,000=9,75,000; +1,25,000=11,00,000. Occupied days 1,200. Hence per day 916.67. The nearest listed value is not exact, so the marked answer is invalid.

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