A nursing home has the following annual budget. Calculate the budgeted break-even point in inpatient days.Inpatient days 25,000 per annumFees (inpatient) $1,500,000 Costs Variable Fixeddirect supplies 120,000 Direct salaries 850,000 Patient service overhead 55,000 140,000Administration 100,000 190,000

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To calculate the break-even point, we first need to determine the total fixed costs, total variable costs, and the price per unit (inpatient day).

Step 1: Calculate total fixed costs Fixed costs are those that do not change with the level of output. In this case, they include direct salaries, patient service overhead, and administration costs. Total fixed costs = Direct salaries + Patient service overhead + Administration = $850,000 +$140,000 + $190,000 =$1,180,000

Step 2: Calculate total variable costs Variable costs are those that change with the level of output. In this case, they include direct supplies and patient service overhead. Total variable costs = Direct supplies + Patient service overhead = $120,000 +$55,000 = $175,000

Step 3: Calculate variable cost per inpatient day Variable cost per inpatient day = Total variable costs / Total inpatient days = $175,000 / 25,000 =$7 per inpatient day

Step 4: Calculate price per inpatient day Price per inpatient day = Total fees / Total inpatient days = $1,500,000 / 25,000 =$60 per inpatient day

Step 5: Calculate the break-even point in inpatient days The break-even point is the level of output at which total revenues equal total costs. It can be calculated using the formula: Break-even point in units = Total fixed costs / (Price per unit - Variable cost per unit) Break-even point in inpatient days = $1,180,000 / ($60 - $7) = 22,857 inpatient days

So, the budgeted break-even point is approximately 22,857 inpatient days.

To calculate the break-even point in inpatient days, we first need to calculate the total fixed costs, total variable costs, and the price per inpatient day.

1. Total Fixed Costs: Add up all the fixed costs. In this case, it's Direct salaries ($850,000) + Patient service overhead ($140,000) + Administration ($190,000) =$1,180,000.

2. Total Variable Costs: Add up all the variable costs. In this case, it's direct supplies ($120,000) + Patient service overhead ($55,000) + Administration ($100,000) =$275,000.

3. Price per Inpatient Day: This is the total fees divided by the number of inpatient days. So, $1,500,000 / 25,000 =$60.

4. Variable Cost per Inpatient Day: This is the total variable costs divided by the number of inpatient days. So, $275,000 / 25,000 =$11.

5. Contribution Margin per Inpatient Day: This is the price per inpatient day minus the variable cost per inpatient day. So, $60 -$11 = $49.

6. Break-Even Point in Inpatient Days: This is the total fixed costs divided by the contribution margin per inpatient day. So, $1,180,000 /$49 = approximately 24,082 inpatient days.

So, the budgeted break-even point is approximately 24,082 inpatient days.

To calculate the break-even point in inpatient days, we first need to calculate the total fixed costs, total variable costs, and the price per inpatient day. Then, we use the formula for the break-even point:

Break-even point = Total Fixed Costs / (Price per unit - Variable Cost per unit)

1. Calculate the total fixed costs:

   • Direct salaries: $850,000
   • Patient service overhead: $140,000
   • Administration: $190,000
   • Total Fixed Costs = $850,000 +$140,000 + $190,000 =$1,180,000

2. Calculate the total variable costs:

   • Direct supplies: $120,000
   • Patient service overhead: $55,000
   • Administration: $100,000
   • Total Variable Costs = $120,000 +$55,000 + $100,000 =$275,000

3. Calculate the price per inpatient day:

   • Fees (inpatient): $1,500,000
   • Inpatient days: 25,000 per annum
   • Price per inpatient day = $1,500,000 / 25,000 =$60

4. Calculate the variable cost per inpatient day:

   • Variable Cost per inpatient day = Total Variable Costs / Inpatient days = $275,000 / 25,000 =$11

5. Calculate the break-even point:

   • Break-even point = Total Fixed Costs / (Price per unit - Variable Cost per unit) = $1,180,000 / ($60 - $11) = 23,500 inpatient days

So, the budgeted break-even point is 23,500 inpatient days.