Chapter 6, Problem 6.1BE

John Fleming, chief administrator for Valley View Hospital, is concerned about the costs for tests in the hospital's lab. Charges for lab tests are consistently higher at Valley View than at other hos- pitals and have resulted in many complaints. Also, because of strict regulations on amounts reim- bursed for lab tests, payments received from insurance companies and governmental units have not been high enough to cover lab costs. Mr. Fleming has asked you to evaluate costs in the hospital's lab for the past month. The fol- lowing information is available: a. Two types of tests are performed in the lab-blood tests and smears. During the p 1,800 blood tests and 2,400 smears were performed in the lab. past month,

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