The controller for Rainbow Children’s Hospital, located in Munich, Germany, estimates that the hospital uses 30 kilowatt-hours of electricity per patient-day, and that the electric rate will be .10 euro per kilowatt-hour. The hospital also pays a fixed monthly charge of 1,000 euros to the electric utility to rentemergency backup electric generators. Required: Construct a flexible budget for the hospital’s electricity costs using each of the following techniques.1. Formula flexible budget.2. Columnar flexible budget for 30,000, 40,000 and 50,000 patient-days of activity. List variable and fixed electricity costs separately.
The controller for Rainbow Children’s Hospital, located in Munich, Germany, estimates that the hospital uses 30 kilowatt-hours of electricity per patient-day, and that the electric rate will be .10 euro per kilowatt-hour. The hospital also pays a fixed monthly charge of 1,000 euros to the electric utility to rentemergency backup electric generators. Required: Construct a flexible budget for the hospital’s electricity costs using each of the following techniques.1. Formula flexible budget.2. Columnar flexible budget for 30,000, 40,000 and 50,000 patient-days of activity. List variable and fixed electricity costs separately.
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter3: Cost Behavior And Cost Forecasting
Section: Chapter Questions
Problem 36E
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The controller for Rainbow Children’s Hospital, located in Munich, Germany, estimates that the hospital uses 30 kilowatt-hours of electricity per patient-day, and that the electric rate will be .10 euro per kilowatt-hour. The hospital also pays a fixed monthly charge of 1,000 euros to the electric utility to rent
emergency backup electric generators.
Required: Construct a flexible budget for the hospital’s electricity costs using each of the following techniques.
1. Formula flexible budget.
2. Columnar flexible budget for 30,000, 40,000 and 50,000 patient-days of activity. List variable and fixed electricity costs separately.
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