Bethesda Hospital The management accountant of Bethesda Hospital is reviewing the Daycare department’s financial results. The Daycare department is the unit in the hospital that takes care of patients having minor injuries. People come to the hospital, get first aid treatment and go home again. In his review, the management accountant uses Daycare’s monthly total operational cost figures for the last three years. He notices that the monthly costs vary considerable from month to month and he wonders why this is. In order to answer this question, he also collected monthly data about average income of patients, number of patients attended, average severity of the patients (using a ten point Severity index from 1-10) and the patients’ average age. The table represents all data available for analysis.

Required:
1. What variable(s) explain Daycare department’s monthly costs best? Please explain why.
2. Suppose the average severity index would increase by 0.5 unit, how much additional costs would this incur?

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Bethesda's Daycare department, monthly data Months 1 Costs Income Patients Severity Age Patients 329974 40 404 1416 2345 275895 41 792 1102 379197 40174 1639 619 6 336073 41408 1514 7 348117 40329 1226 6 360956 41349 1530 7 330036 39362 2140 8 335764 41047 1962 9 289466 41607 948 10 323309 39131 1074 11 236471 37422 800 8695977 73777 43 1416 33 1102 43 1639 40 1514 43 1226 39 1530 38 2140 32 1962 42 948 42 1074 1 32 800 12 252 089 37832 1150 1 32 1150 13 314470 40965 1910 14 243207 40715 612 56 39 1910 37 612 15 277702 40105 920 10 41 920 16 312624 41000 1376 17 264239 39988 1010 18 260516 42164 988 19 257583 39594 1064 20 301896 40681 1526 21 265538 40484 1280 22 369462 38436 1964 23 299188 41498 1766 24 352578 39438 2128 25 322422 41506 1927 26 289 756 39 891 1286 27 319211 39231 1276 976233534535 39 1376 41 1010 37 988 33 1064 37 1526 34 1280 36 1964 38 1766 35 2128 34 1927 35 1286 40 1276