Question:
Gross Profit Analysis. The controller of Lowell Municipal Hospital prepared the following statement of operations, comparing the years 19B to 19A.
|
Inpatient service days
|
.
|
19B
330,000
|
19A
300,000
|
|
Patient service revenues. . . . . . . . . . . . . . . . . . . . . ..
|
|
$13,860,000
|
$12,000,000
|
|
Cost of services rendered:
Medicinal, linens, & other supplies
|
.
|
$ 1,400,000
|
$ 1,000,000
|
|
Salaries - nurses, interns, residents, staff
|
.
|
9,000,000
|
7,500,000
|
|
Patient service overhead
|
.
|
1,500,000
|
1,500,000
|
|
Total cost of services rendered
|
.
|
$11,900,000
|
$10,000,000
|
|
Gross profit
|
.
|
$ 1,960,000
|
$ 2,000,000
|
|
Administrate tive expenses
|
.
|
2,013,000
|
1,800,000
|
Excess of revenues over expenditures .
$ (53,000) $ 200,000
Required: An analysis of the comparative statement of operations, listing the causes of the 19B excess of expenditures over revenues and the causes of the decline since 19A.