Question

In: Accounting

You run a hospital with 100 rooms. Fixed daily cost is $988.00 which includes staff salary,...

You run a hospital with 100 rooms. Fixed daily cost is $988.00 which includes staff salary, property charges, maintenance etc. Variable cost per room is $12.00 which includes cleaning, equipment rentals, utility cost etc. which is incurred only when the room is full. You charge $84.00 per room per day. You sold 37.00 rooms today, how much profit/loss did you earn for today.

Solutions

Expert Solution

Income Statement

Revenue

$ 3,108.00

Less: Variable Cost

$     444.00

Contribution Margin

$ 2,664.00

Less: Fixed cost

$     988.00

Net Income

$ 1,676.00

Calculations wide income statement for better understanding

Working

Details

Details

(A)

Number of Rooms sold today

           37

(B)

Charge per Room

$        84.00

(C )=(AxB)

Total Revenue

$ 3,108.00

(D)

Number of Rooms sold today

           37

(E)

Variable Cost per Room

$        12.00

(F)=(DxE)

Total Variable Cost

$     444.00

(G)=(C-F)

Contribution Margin

$ 2,664.00

(H)

Fixed Cost

$     988.00

(G-H)

Profit for today

$ 1,676.00


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