a. Use the high-low method to estimate the fixed and variable components of admitting costs. b. Express the fixed and variable components of admitting costs as a cost of formula in the form Y= a+bx.
a. Use the high-low method to estimate the fixed and variable components of admitting costs. b. Express the fixed and variable components of admitting costs as a cost of formula in the form Y= a+bx.
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 20E: Activity-based costing for a service company Crosswinds Hospital plans to use activity-based costing...
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HW2-Week 4- Cost behavior and High-Low method
Q1. The administrator of Azalea Hills Hospital would like a cost formula linking the administrative costs
involved in admitting patients to the number of patients admitted during a month. The admitting
Department's costs and the number of patients admitted during the immediately preceding eight
months are given in the following table:
a. Use the high-low method to estimate the fixed and variable components of admitting costs.
b. Express the fixed and variable components of admitting costs as a cost of formula in the form Y=
a + bx.
Month
May
June
July
August
September
October
November
December
Number of Patients
Admitted
1,800
1,900
1,700
1,600
1,500
1,300
1,100
1,500
Admitting
Department
Costs
$14,700
$15,200
$13,700
$14,000
$14,300
$13,100
$12,800
$14,600](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4a6ce481-8e10-4fa9-87f1-1016da64fd41%2F2b9871c8-147e-4c7e-9d8c-e76a968ab46c%2Fj64e8oq_processed.jpeg&w=3840&q=75)
Transcribed Image Text:1 من 1
HW2-Week 4- Cost behavior and High-Low method
Q1. The administrator of Azalea Hills Hospital would like a cost formula linking the administrative costs
involved in admitting patients to the number of patients admitted during a month. The admitting
Department's costs and the number of patients admitted during the immediately preceding eight
months are given in the following table:
a. Use the high-low method to estimate the fixed and variable components of admitting costs.
b. Express the fixed and variable components of admitting costs as a cost of formula in the form Y=
a + bx.
Month
May
June
July
August
September
October
November
December
Number of Patients
Admitted
1,800
1,900
1,700
1,600
1,500
1,300
1,100
1,500
Admitting
Department
Costs
$14,700
$15,200
$13,700
$14,000
$14,300
$13,100
$12,800
$14,600
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