OPERATING COSTING PROBLEMS

Q1. From the following information of MEDI CARE PLUS Hospitals you are asked to decide on their per
MRI Scan cost assuming that in the year the number of scans are 2140. What should be the Scan cost
charged for each MRI if they wish to get at least 12% return on investment?

1. The cost of the MRI Machine is Rs 15 lac and useful life is of 5 years
2. The hospital has rented premise used for the scanning where rent paid is Rs 50000 pm
3. The salary paid to administration staff is Rs 20000 pm
4. The amount paid for the consulting doctors and senior staff is Rs 80000 pm
5. The amount of Electricity bill is on an average of Rs 10000 pm of which 20% is considered to be
fixed.
6. Housekeeping and consumables are around 5000 pm for first six months and later they will
increase by 100%

Q2. From the following information of SHINY SMILES DENTAL CLINICS you are asked to decide on their
total operating cost for the year and suggest the per patient cost assuming that in the year the number
of patients are 3000. The partners have invested a total amount of Rs 20 lac in the Clinic and have
borrowed Rs 10 lac from a bank @ 12% pa. They expect a rate of return of 11% on their own investment
after all expenses.
a. The cost of the Equipments is Rs 18 lac and useful life is of 5 years
b. The clinic has the following expenses per month: Rent Rs 10000, Repairs Rs 6000, Staff salary Rs
10000, Consumables Rs 5000.
c. Marketing costs are RS 5000 pm having a 20% fixed component
d. Telephone bills are Rs 2000 pm having a 10% fixed component.
e. Printing and stationery charges are Rs 5000 pm.

Q3. The HML Hospitals Pvt Ltd is divided into four departments. A, B, C rendering direct service to
patients and D is an administration department providing service to rest three departments. The actual
costs for the period are as follows:
Rent Rs. 6,000
Repair 3,600
Depreciation 2,700
Light 600
Supervision 9,000
Fire Insurance in respect of consumables 3,000
Employer’s contribution to Group Insurance 900
Power 5,400
The following data are available in respect of four departments :

Deptt. A Deptt. B Deptt. C Deptt. D

Area sq. ft. 450 330 270 150
Number of workers 72 48 36 24
Total Wages (Rs.) 24,000 18,000 12,000 6,000
Power usage of Machines 800 600 400 200
Value of machineries (Rs.) 72,000 54,000 36,000 18,000
Value of consumables (Rs.) 45,000 27,000 18,000 _
 Apportion the costs of the various departments on most equitable basis and find out the operating
cost of each department in the hospital

Q4. From the following information of Worldwide hospitals Ltd you are asked to compute the operating
cost of each department by distribution and redistribution of the various cost according to the given
standard
Main Departments Rs. Rs.

A 2,400

B 2,100

C 1,500 6,000

Common Departments

X 702

Y 900 1,602

TOAL 7,602

The expenses of service departments are charged on a percentage basis as follows:

Service Departments Production Departments Service Departments

A B C X Y

X 20% 40% 30% _ 10%

Y 40% 20% 20% 20% _