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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.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
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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