The administrator of Azalea Hills Hospital would like a cost formula linking the administrative costsinvolved 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 givenin the following table:Number of AdmittingMonth Patients Admitted Department CostsMay ........................... 1,800 $14,700June .......................... 1,900 $15,200July ........................... 1,700 $13,700August ....................... 1,600 $14,000September ................ 1,500 $14,300October ..................... 1,300 $13,100November ................ 1,100 $12,800December ................. 1,500 $14,600Required:1. Use the high-low method to estimate the fixed and variable components of admitting costs.2. Express the fixed and variable components of admitting costs as a cost formula in the formY a bX .
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:
Number of Admitting
Month Patients Admitted Department Costs
May ........................... 1,800 $14,700
June .......................... 1,900 $15,200
July ........................... 1,700 $13,700
August ....................... 1,600 $14,000
September ................ 1,500 $14,300
October ..................... 1,300 $13,100
November ................ 1,100 $12,800
December ................. 1,500 $14,600
Required:
1. Use the high-low method to estimate the fixed and variable components of admitting costs.
2. Express the fixed and variable components of admitting costs as a cost formula in the form
Y a bX .
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