Complete questions with proper format and details. The data below have been taken from the cost records of the Halifax General Hospital. The data relateto the costs of admitting patients at various levels of patient activity:Month1.2.3.May..June4.July..AugustSeptember..October.......November.December.Requirements:Using the high-low method, and based upon the data collected:(a) estimate the variable cost per admission.(b) estimate the fixed costs for admission.(c) estimate the cost formula for admissions (cost formula is in the format of Y = a + bx).Using the cost formula you derived above, what admission costs would you expect to be incurredduring a month in which there are 2,750 hospital admissions?Prepare a scattergraph plot using the data. Plot cost on the vertical axis and activity on thehorizontal axis. Add the visual best-fit "trendline" to fit a line through the points on yourscattergraph. Also add the "high-low trendline" so that you can compare the two trendlines andthe data set points in Requirement 4. (Hint: You can either use software, such as Microsoft Excel,or Google Sheets, or draw the scattergraph plot on your computer using a drawing program(Microsoft Paint, or similar) or you can draw and plot the points on a piece of paper by hand andtake a picture and insert the picture into your document.)Scrutinize the points on your scattergraph, and explain why the high-low method would or wouldnot yield an accurate cost formula in this situation.Number of PatientsAdmitted3,6003,8002,9003,2003,3002,6002,2003,500AdmittingDepartment Costs$ 29,400$ 28,700$ 27,400$ 28,000$ 28,600$ 26,200$ 25,600$ 29,300

Introduction: - High-low method is one of the techniques that is used to separate fixed and…

equirements: . Using the high-low method, and based upon the data collected: (a) estimate the variable cost per admission. (b) estimate the fixed costs for admission. (c) estimate the cost formula for admissions (cost formula is in the format of Y = a + bx).

equirements: . Using the high-low method, and based upon the data collected: (a) estimate the variable cost per admission. (b) estimate the fixed costs for admission. (c) estimate the cost formula for admissions (cost formula is in the format of 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 5MAD

See similar textbooks

Similar questions

In the cost formula, the term 12,000 a. is the variable rate. b. is the dependent variable. c. is the independent variable. d. is the intercept. e. cannot be determined from the above formula. Use the following information for Multiple-Choice Questions 3-4 through 3-7: The following cost formula was developed by using monthly data for a hospital. Total Cost = 128,000,000 + (12,000 Number of Patient Days)
To compute a daily rate that reflected the difference in demands, patients were placed in three categories according to illness severity, and the following annual data were collected: Cost of Activity Activity Driver $ 546,780 2,132,200 441,630 4,185,700 $7,306,310 Activity Lodging Monitoring Feeding Nursing care Total The demands associated with patient severity are also provided: Severity Patient Days Monitoring Hours Nursing Hours High Medium Low 7,170 10,180 3,680 $ Patient days Monitoring hours used Patient days Nursing hours High severity Medium severity Low severity 15,170 12,030 3,260 133,100 72,900 14,300 Required: 1. Suppose that the costs of daily care are assigned using only patient days as the activity driver (which is also the measure of output). Compute the daily rate using this unit-based approach of cost assignment. If required, round your answer to the nearest cent. per day 2. Compute activity rates using the given activity drivers (combine activities with the same…
Compute the linear cost function, relating total overhead costs to physician contact hours, using the representative observations of 200 and 300 hours. Plot the linear cost function. Does the constant component of the cost function represent the fixed overhead costs of Young and Associates? Why?
Standard costs are divided into which of the following components? A. price standard and quantity standard B. quality standard and quantity standard C. variance standard and quantity standard D. materials standard and labor standard Which of the following activity bases would be the most appropriate for food costs of a hospital? A. how many MRI's are taken B. number of patients who stay in the hospital C. quantity of prescriptions filled D. number of nurses scheduled to work To calculate income from operations, total service department charges are A. subtracted from operating expenses B. subtracted from income from operations before service department charges C. subtracted from gross profit margin D. added to income from operations before service department charges
In the cost formula, the term 128,000,000 a. is the total variable cost. b. is the dependent variable. c. is the variable rate. d. is the total fixed cost. e. cannot be determined from the above formula. Use the following information for Multiple-Choice Questions 3-4 through 3-7: The following cost formula was developed by using monthly data for a hospital. Total Cost = 128,000,000 + (12,000 Number of Patient Days)
partial list of Foothills Medical Center’s costs follows:a. Cost of laundry services for operating room personnelb. Salary of intensive care personnelc. Depreciation on patient roomsd. Cost of blood testse. Nurses’ salariesf. Cost of patient mealsg. Overtime incurred in the Patient Records Department due to a computerfailureh. Operating room supplies used on patients (catheters, sutures, etc.)i. Doctor’s feej. Cost of X-ray testk. Cost of maintaining the staff and visitors’ cafeterial. Cost of drugs used for patientsm. Cost of intravenous solutions used for patientsn. Cost of improvements on the employee parking loto. Salary of the nutritionistp. General maintenance of the hospitalq. Cost of advertising hospital services on televisionr. Cost of new heart wings. Training costs for nursest. Depreciation of X-ray equipmentu. Utility costs of the hospital Instructions1. What would be Foothills Medical Center’s most logical definition for the final cost object? Explain.2. Identify whether…
Projected Revenues by Patient Services Department Routine Care Laboratory Radiology Assume that the hospital uses the direct method for cost allocation. Furthermore, the cost driver for general administration and financial services is patient services revenue, while the cost driver for facilities is space utilization. a. What are the appropriate allocation rates? b. Use an allocation table similar to Exhibit 6.7 to allocate the hospital's overhead costs to the patient services departments. Total revenues Projected Costs for All Departments Patient Services Departments (Direct Costs): Routine Care Laboratory Radiology Total costs Support Services Departments (Overhead Costs): Financial Services Facilities Housekeeping General Administration Human Resources Total overhead costs Total costs of both patient and support services Projected profit EXHIBIT 6.7 Kensington Hospital: Final Allocations Support Department (allocation rate) Financial Services ($0.05556) Facilities Housekeeping…
Could you outline the difference between a fixed cost and a variable cost?Could you identify which expense is a fixed cost and which is a variable cost from the information in the scenario (storage unit vs. hospital gowns)?Develop a plan to reduce both costs within the next fiscal year.
Suppose that a surgical ward has gathered the following information for four nursing activities and two types of patients: Treating patients Providing hygienic care Responding to requests Monitoring patients Required: Normal Intensive Driver Normal Treatments Intensive Hygienic hours Requests Monitoring hours Patient Category Normal Intensive 7,900 1. Determine the total nursing costs assigned to each patient category. Costs Assigned per patient day per patient day 4,800 32,000 6,000 8,000 19,100 80,000 72,000 Activity Rate $4.00 5.00 2. Output is measured in patient days. Assuming that the normal patient category uses 8,000 patient days and the intensive patient category uses 6,400 patient days, calculate the nursing cost per patient day for each type of patient. Round your answers to the nearest cent. 2.00 3.00
Please do not give solution in image format and fast answering please and explain proper steps by Step.?
Northwest Hospital is a full-service hospital that provides everything from major surgery and emergency room care to outpatient clinics.Required:For each cost incurred at Northwest Hospital, indicate whether it would most likely be a direct cost or an indirect cost of the specified cost object by placing an X in the appropriate column.
Which of the following activity bases would be the most appropriate for food costs of a hospital? a.quantity of prescriptions filled b.how many MRI's are taken c.number of nurses scheduled to work d.number of patients who stay in the hospital