Chapter 8, Problem 8.11E

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Assume that Brightview Senior Care has two categories of payers. Medicare pays $75.00 per day, and private pay patients pay the established per diem rate, but approximately 8% of private pay charges are not collected. If 40% of the patients are Medicare and 60% are private pay, what rate must be set to generate $200,000 in profit? Variable costs are $50.00 per day, and fixed costs are expected to be $1,200,000. Expected volume is 60,000 patient days.

29) As part of his job as cost analyst, John Kelly collected the following information concerning the operations of the Machining Department: Observation Machine-hours Total Operating Costs January 4,700 $43,000 February 5,060 45,395 March 4,180 42,535 April 4,500 43,600 May 4,250 42,890 Required: a. Use regression analysis to estimate the cost function with machine-hours as the cost driver. b. If June's estimated machine-hours are 4,300, calculate the total estimated costs of the Machining Department?