5. Use the high-low method to determine the hospital's cost equation using nursing hours as the cost driver. Predict total overhead costs if 23,500 nursing hours are predicted for the month. 6. Stenback runs a regression analysis using nursing hours as the cost driver to predict total hospital overhead costs. The Excel output from the regression analysis is as follows: (Click the icon to view the regression analysis.) If 23,500 nursing hours are predicted for the month, what is the total predicted hospital overhead? 7. Stenback then ran the regression analysis using number of patient days as the cost driver. The Excel output from the regression is shown here: E: (Click the icon to view the regression analysis.) If 3,640 patient days are predicted for the month, what is the total predicted hospital overhead 8. Which regression analysis (using nursing hours or using number of patient days as the cost driver) produces the best cost equation? Explain your answer. SUMMARY OUTPUT - Nursing hours as cost driver Regression Statistics Multiple R 0.979527 R Square 0.959472 Adjusted R Square 0.94934 Standard Error 11,732.0182 Observations ANOVA df ss 13,034,272,329 550,561,004 F 94.698115 1 MS 13,034,272,329 137,640,251 Significance F 0.000624 Regression Residual Total 13,584,833,333 Standard Lower Coefficients t Stat P-value 95% Upper 95% 302,260.758 14.239 Intercept Error 26,151.127 1.138 8.782 229,653.59 11.08 0.001 157,046.421 X Variable 1 9.731 0.000 7.917 SUMMARY OUTPUT - Using number of patient days as cost driver Regression Statistics Multiple R R Square Adjusted R Square 0.761223 0.579461 0.474326 37,792.03819 Standard Error Observations ANOVA df SS MS F Significance F. 1 5.511602 0.078715 Regression Residual 7,871,880,730 5,712,952,604 13,584,833,334 7,871,880,730 1,428,238,151 Total 5 Standard Lower Upper Coefficients Error t Stat P-value 95% 95% Intercept 80,793.288 3.635 0.022 69,328.982 517,965.24 293,647.11 45.47 X Variable 1 19.367 2.348 0.079 -8.304 99.237 Nursing Hours 22,000 27,500 Hospital Month Overhead Costs July ....... $ 472,000 August .... $ 520,000 September $ 419,000 October ... $ 456,000 November . $ 562,000 December .$ 450,000 Number of Overhead Cost Overhead Cost Patient Days per Nursing Hour per Patient Day 3,680 $ 21.45 $ 128.26 4,380 $ 18.91 $ 118.72 4,240 $ 23.28 $ 98.82 3,430 $ 22.80 $ 132.94 5,620 $ 19.38 $ 100.00 3,220 $ 23.68 $ 139.75 18,000 20,000 29,000 19,000 Requirement 5. Use the high-low method to determine the hospital's cost equation using nursing hours as the cost driver. Predict total overhead costs if 23,500 nursing hours are predicted for the month. Use the high-low method to determine the hospital's cost equation using nursing hours as the cost driver. (Round the variable cost to the nearest cent.) y = $ 13.00 x + $ 185,000 Predict total overhead costs if 23,500 nursing hours are predicted for the month. The total predicted overhead costs for the month is $
