Sharifi Hospital bases its budgets on patient-visits. The hospital's static budget for October appears below: The total overhead cost at an activity level of 9,200 patient-visits per month should be:

Question

Sharifi Hospital bases its budgets on patient-visits. The hospital's static budget for October appears below:  The total overhead cost at an activity level of 9,200 patient-visits per month should be:

Quizplus · Accepted Answer

To calculate the total overhead cost at an activity level of 9,200 patient-visits per month, we need to use the following formula:
Total Overhead Cost = Fixed Overhead Cost + (Variable Overhead Rate x Activity Level)

Fixed Overhead Cost is given in the static budget as $210,000.

Variable Overhead Rate can be calculated using the following formula:
Variable Overhead Rate = (Total Variable Overhead Cost) / (Total Patient-Visits)
From the static budget, we can see that the variable overhead cost is $39,300 for 8,100 patient-visits. So, the variable overhead rate can be calculated as:
Variable Overhead Rate = 39,300 / 8,100 = $4.85

Now, we can use the formula to calculate the total overhead cost at an activity level of 9,200 patient-visits per month:
Total Overhead Cost = 210,000 + (4.85 x 9,200) = $249,300

Therefore, the best choice is C.

Sharifi Hospital Bases Its Budgets on Patient-Visits