Question

1. UPMC Hospital at Robinson Township prepared its 2020 planning budget (static budget) by months and was approved in December 2019. The budget was prepared based on the expected patient-visits for each month. The hospital's static budget for April 2020 is as follow:

Budgeted number of patient-visits		7,600
Budgeted variable overhead costs:
Supplies (@$4.70 per patient-visit)…………….	$	35,720
Laundry (@$7.80 per patient-visit)…………….		59,280
Total variable overhead cost………………..		95,000
Budgeted fixed overhead costs:
Wages and salaries……………………………		156,000
Occupancy costs………………………………		227,726
Total fixed overhead cost……………………..		354,600
Total budgeted overhead costs…………	$	833,326

In March 2020, the hospital administration considers an increase in patient-visits for April 2020 due to Coronavirus; and expecting 9,200 patient-visits. You are the hospital financial manager and you were asked to prepare a flexible budget for the expected patient-visits for 9,200 patients. What would be the TOTAL BUDGETED OVEARHEAD COST for the flexible budget?   

Activity level	Per visit	7,600	9,200
Variable overhead costs
Supplies   ($)	4.70
Laundry   ($)	7.8
Total Variable Overhead Cost ($)	12.50
Budgeted Fixed Overhead Costs
Wages and salaries
Occupancy costs
Depreciation Costs
Total Fixed Overhead Costs
Total Budgeted Overhead Cost

Answer 1

Activity level	Per visit P	7,600	9,200
Variable overhead costs A
Supplies   ($)   7600*4.7 and 9200*4.7	4.7	35720	43240
Laundry   ($) 7.8*7600 and 9200*7.8	7.8	59280	71760
Total Variable Overhead Cost ($) A	12.5	95000	115000
Budgeted Fixed Overhead Costs
Wages and salaries		156000	156000
Occupancy costs		227726	227726
Depreciation Costs		354600	354600
Total Fixed Overhead Costs F		738326	738326
Total Budgeted Overhead Cost A+F		$833326	$853326
If any doubt please comment