My first Magazine ACC 206 All Assignments | Page 33

Cedars Hospital has average revenue of $180 per patient day. Variable
costs are $45 per patient day; fixed costs total $4,320,000 per year.
a.
How many patient days does the hospital need to break even?
b. What level of revenue is needed to earn a target income of
$540,000?
c. If variable costs drop to $36 per patient day, what increase in fixed
costs can be tolerated without changing the break-even point as
determined in part (a)?
Chapter 5 Problem 6
6. Direct and absorption costing
The information that follows pertains to Consumer Products for the
year ended December 31, 20X6.
Inventory, 1/1/X6
24,000 units
Units manufactured
80,000
Units sold
82,000