/raming inconsistencies in ineremental analysis Central Hospital,21 managed by Ralph, is eontemplating the sale of its renal dialysis unit to a group of physicians who have offered to maintain the current level of service and to employ the present dialysis staff, while moving the facility to an adjacent location. Patients would be unaffected. Ralph's eost analysis reveals the following annual cost stmcture:

salaries and wages in dialysis unit 525,000;

other direet eosts 390,000; and indireet eosts 810,000.

8,000 treatments are being performed; and the hospital is reimbursed at the rate of 140 per treatment. Ralph figures the hospital is losing quite a bit here (605,000 per year) and is anxious to see the unit taken over by the group of physieians.

The indireet eosts refleet a variety of iterns, allocated in eustomary fasbion.

Typieal items are building depreeiation (square feet), employee benefits (bours), housekeeping (square feet), laundry (pounds of laundry), dietary (meals served), and nursing administration (speeifie identifieation).

What prineiple or prineiples of eonsistent framing has Ralph violated in analyzing the physician group's buyout offer?

AppendixLO1