1. Group V. ROKER
Managerial Accounting
Assignment
Dubai Medical Center
Group 5 – ROKER
Suhartono – Ringga – Ricky – Endang - Insanuri

2. Group V. ROKER
BACKGROUND
Dubai Medical Centre’s form one of the largest networks of medical centres in the UAE
offering a full range of medical services from general medicine, pediatrics, dentistry, to
specialty services like endocrinology, cardiology, neurology, gastroenterology,
pulmonology, dermatology, etc.
It is a corollary of expansion integrating the current brands of clinics,
polyclinics, and diagnostic centre’s at 95 location under one name.
Dubai Medical Centre interfaces with the existing and new cusomer
through Dubai Hospital, Dubai Medical Centre’s itself, Dubai Pharmacy
and Dubai Diagnostic Centre. The Clinics previously known as Medical
centre’s have been consolidated under one identity of Dubai Medical
Centre bringing together the strength of their high standard and services.
All Dubai Medical Centre’s cater to the healthcare needs of varying
communities & socio economics groups with a human touch. Building on
the reputation and thrust of Medical Centre, a network of neighborhood
family clinics, Dubai Medical Centre continue bringing healthcare within
reach of all

3. Group V. ROKER
Main Issues.
Dubai Medical Centre’s operates a general hospital. The medical center also rents space
and beds to separately owned entities rendering specialized services, such as
Pediatrics and Psychiatrics Care.
Dubai Medical Centre’s charge each separate entity for common services such
as patient meals and laundry, and for administrative services, such as billings
and collections
Space and bed rentals are fixed charges for the year, based on bed capacity
rented to each entity

4. Group V. ROKER
DMC structure cost
Patient – days
(variable) - USD
Bed Capacity (fixed) -
USD
Dietary 600,000.00 -
Janitorial - 70,000.00
Laundry 300,000.00 -
Laboratory 450,000.00 -
Pharmacy 350,000.00 -
Repairs & Maintenance - 30,000.00
General & Administrative - 1,300,000.00
Rent - 1,500,000.00
Billings & Collections 300,000.00 -
TOTAL 2,000,000.00 2,900,000.00
During the year ended June30, 20x1, Pediatrics charged each patient an average of $300 per day, had a
capacity of 60 beds, and had revenue of $6million for 365 days.
In addition, Pediatrics directly employed personnel with the following annual salary costs per employee:
- Supervising nurses, $25,000;
- Nurses, $20,000; and
- Aides, $9,000.
*year ended June 30, 20x1

5. Group V. ROKER
DMC has the following minimum departmental personnel
requirements, based on total annual patient days
ANNUAL PATIENT DAYS AIDES NURSES SUPERVISING
NURSES
UP TO 22,000 20 10 4
22,001 s/d 26,000 25 14 5
26,001 s/d 29,200 31 16 5
QUESTION 1:
Calculate the minimum number of patient days required for Pediatrics to break even for
the year ending June 30, 20x2, if the additional 20 beds are not rented. Patient demand
is unknown, but assume that revenue per patient day, cost per patient day, cost per bed,
and salary rates will remain the same as for the year ended June30 ,20x1.

6. Group V. ROKER
Break Even Point in patient/days
FIXED COST (USD)
Medical Centre charges 2,900,000.00
Supervising Nurse ($25,000x4) 100,000.00
Nurse ($20,000x10) 200,000.00
Aides ($9,000x20) 180,000.00
Total fixed cost 3,380,000.00
Contribution margin per patient per-day (USD)
Revenue per patient-day 300,00
Less Variable cost per patient-day (USD)
($600,000/$300 = 20,000 patient-days)
($200,000/20,000 patient-days) $100,00
Contribution margin per patient-days $200,00

7. Group V. ROKER
Break Even Point
Break Even Point in
patient-days
=
𝐹𝐼𝑋𝐸𝐷 𝐶𝑂𝑆𝑇
𝐶𝑂𝑁𝑇𝑅𝐼𝐵𝑈𝑇𝐼𝑂𝑁 𝑀𝐴𝑅𝐺𝐼𝑁 𝑃𝐸𝑅 𝑈𝑁𝐼𝑇
=
$ 3,380,000.00
$ 200
= 16,900 patient-days

8. Group V. ROKER
Question 2:
Assume that patient demand, revenue per patient day, cost per patient day, cost per bed,
and salary rates for the year ending June 30, 20x2, remain the same as for the year
ended June 30, 20x1. Prepare a schedule of Pediatrics‘ increase in revenue and increase
in costs for the year ending June 30, 20 x 2. Determine the net increase or decrease in
Pediatrics‘ earnings from the additional 20 beds if Pediatrics rents this extra capacity
from Dubai Medical Center.

9. Group V. ROKER
Compute of loss from rental of additional 20
beds:
Increase in revenue (USD)
20 additional bed x 90 days x $300 charge per
day
540,000.00
Increase in expense (USD)
20 add beds x 90 days x $100 per day 180,000.00
Fixed charges by medical centre (USD)
2,900,000 / 60 beds = $48,333 per bed
48,333 / 20 beds 966,660.00
Salaries:
Pediatrics employs only minimum no. of
required personal, it fixed so there are no
personnel are required
0
Total increase in expense 1,146,660.00
(606,660.00)Decrease

10. Group V. ROKER
Recommendations
Business
growth
strategies
Advanced the medical technology in the pediatric hospital
Employ highly qualified and distinguished medical professionals and competent
administrative staff for the hospital.
The owners have to work with consultants and advisors in medical, legal, insurance,
business, and management field to provide him with the comprehensive knowledge
Pediatrics hospital cannot refuse to treat extra patients during the time of need, thus
this will help image building of the hospital
If possible, the authority should not holding the period of patient to stay in the
hospital longer than the expected time.
Staff attitude towards service quality must be at the maximum level

11. Group V. ROKER
Earth and Artistry Inc.
Group5 –ROKER
Suhartono– Ringga– Ricky – Endang- Insanuri

12. Group V. ROKER
Earth and Artistry Inc.
• Owner : Sasha Cairns
• Provides commercial landscaping services
• Cairns wants to develop costs estimates that can use to prepare bid
on jobs
• Estimates for each 1,000 square feet
Direct material $ 400
Direct labor (5 direct labor hours at $10 per hour) $ 50
Overhead (at $18 per direct labor hour) $ 90
Total cost per 1,000 square feet $ 540

13. Group V. ROKER
Overhead & labor hours in past 12 months
Months Total Overhead
Regular Direct
Labor Hours
Overtime Direct
Labor Hours
Total Direct Labor
Hours
January $ 54,000 2,910 190 3,100
February $ 47,000 2,380 20 2,400
March $ 48,000 2,210 40 2,250
April $ 56,000 2,590 210 2,800
May $ 57,000 3,030 470 3,500
June $ 65,000 3,240 760 4,000
July $ 64,000 3,380 620 4,000
August $ 56,000 3,050 350 3,400
September $ 53,000 2,760 40 2,800
October $ 47,000 2,770 30 2,800
November $ 47,000 2,120 30 2,150
December $ 54,000 2,560 240 2,800
$ 648,000 33,000 3000 36,000
*) The overtime premium is 50% of the direct labor wage rate

14. Group V. ROKER
REQUIRED #1
Cairn performs regression formula. The
formula is
OH = 26,200 + 9.25 DLH
OH : overhead
DLH : direct labor hours
The calculation show different results because
preliminary estimate using analysis of the
past 12 months with total direct labor
36,000 hours, so the cost estimate relevant
only at that activities, if activities are
different, so it is less relevant.
As for the Least -Squares regression fixed and
variable overheads are separated so as to
estimate the cost at the level of activity of the
other more relevant.
Months DLH OH
January 3100 $ 54,875
February 2400 $ 48,400
March 2250 $ 47,013
April 2800 $ 52,100
May 3500 $ 58,575
June 4000 $ 63,200
July 4000 $ 63,200
August 3400 $ 57,650
September 2800 $ 52,100
October 2800 $ 52,100
November 2150 $ 46,088
December 2800 $ 52,100
36000 $ 647,400

15. Group V. ROKER
REQUIRED #2
Using the overhead formula that was derived from the least squares regression, determine a total variable
cost estimate for each 1,000 square feet of landscaping.
Using regression :
Direct material $ 400
Direct labor (5 DLH x $10 per hour) $ 50
Overhead (9.25 x 5DLH per direct labor hour) $ 46.25
Total variable cost per 1,000 square feet $ 496.25

16. Group V. ROKER
REQUIRED #3
Cairns has been asked to submit a bid on a landscaping project for the city government consisting of
60,000 squarefeet. Cairns estimates that 40 percent of the direct-labor hours required for the project will
be on overtime.
Calculate the incremental costs that should be included in any bid that Cairns would submit on this
project. Use the overhead formula derived from the least-squares regression.
Incremental cost :
Direct material (60 x $400) $ 24,000
Direct labor (60 x $50) $ 3,000
Variable overhead (60 x (9.25 per DLH x 5 DLH)) $ 2,775
Overtime (60 x ($5 per DLH x 5 DLH) x 0.4) $ 600.00
Incremental cost $ 30,375

17. Group V. ROKER
REQUIRED #4
Sould management rely on the overhead formula derived from the
least-squares regression as the basis for the variable overhead
component of its cost estimate?

18. Group V. ROKER
REQUIRED #5
Using Activity Based Costing apporach, overhead divide into 3 separate pools :
OH1 = 10,000 + 4.10DLH
where DLH denotes direct labor hours
OH2 = 9,100 + 13.50SFS
where SFS denotes the number of square feet of turf seeded (in thousands)
OH3 = 8,000 + 6.60PL
where PL denotes the number of individual plantings
Assumtion : 5 direct labor hours will be needed to landscape each 1,000 square feet
a)

19. Group V. ROKER
RECOMMENDATION

20. Group V. ROKER
THANK YOU