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Sharifi hospital bases it's budget on patients visits. The hospitals static for October appears below. The total overhead cost at an activity level of 7,700 patient visits per month should be

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The total overhead cost at an activity level of 7,700 patient visits per month should be $245,760

What is a total overhead cost?

Its means the expenses that is associated with running of a firm but can not be linked to creating a product or service.

Calculation of overhead cost at an activity level of 7,700 patient visits per month:

Variable overhead costs:

Supplies = 7,700 x $5.40 = $41,580

Laundry = 7,700 x $8.40 = $64 680

Total variable overhead costs $106,260

Fixed overhead costs:

Wages and salaries 53,400

Occupancy costs 86,100

Total fixed overhead costs $139,500

Total overhead costs = $106,260 + $139,500

Total overhead costs = $245,760

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