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A hospital has provided the following details for levels of activity and maintenance cost: Patient-Days Monthly Maintenance Cost High Activity Level (August) 3,500 $10,400 Low
A hospital has provided the following details for levels of activity and maintenance cost:
Patient-Days | Monthly Maintenance Cost | |
High Activity Level (August) | 3,500 | $10,400 |
Low Activity Level (March) | 2,500 | $9,200 |
a) Based on the high-low method, what is the hospital's variable maintenance cost per patient-day?
b) Based on the high-low method, what is the hospital's fixed maintenance cost per month?
c) If the hospital experiences 2,250 patient-days in a month, how much should it expect to incur in maintenance costs that month?
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