Day: March 17, 2023

A hospital budgets for overheads totalling £11,500,000 for a financial year.

It expects to treat 25,000 patients in the year.

Each patient stays an average of 10 days and the hospital absorbs overheads on a patient/day basis.

Its direct costs for the year are budgeted at £25,000,000.

What is its overhead absorption rate?

Select ONE answer:

1. £46 per patient day
2. £100 per patient day
3. £146 per patient day
4. £460 per patient day

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct – £11,500,000 / (25,000 * 10 days)
2. Not correct
3. Not correct
4. Not correct

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