# Managerial Accounting: E5-10 St. Mark's Hospital contains 450 beds

Managerial Accounting Exercise 5-10 High-Low Method; Predicting Cost St. Mark's Hospital contains 450 beds. The average occupancy rate is 80% per month. In other words, on average, 80% of the hospital's beds are occupied by patients. At this level of occupancy, the hospital's operating costs are \$32 per occupied bed per day, assuming a 30-day month. This \$32 figure contains both variable and fixed cost elements. During June, the hospital's occupancy rate was only 60%. A total of \$326,700 in operating cost was incurred during the month. Requirement 1: a. Estimate the variable cost per occupied bed on a daily basis using the high-low method. (Omit the "\$" sign in your response.) b. Estimate the total fixed operating costs per month using the high-low method. (Omit the "\$" sign in your response.) Requirement 2: Assume an occupancy rate of 70% per month. What amount of total operating cost would you expect the hospital to incur? (Omit the "\$" sign in your response.)