A hospital is analyzing its overhead costs. It is not clear whether the number of patient days or nursing hours would be the best cost driver to use in predicting the hospitals overhead. The latest information on the hospital is as follows:

Month Hospital Nursing No. of Overhead Overhead Cost

Overhead Hours Patient Cost Per Per Patient

Costs Days Nursing Hr. Day

January $700,000 34,250 5,550 $20.43 $126.13

February $799,000 37,250 6,500 $21.44 $122.92

March $617,000 29,150 6,375 $21.17 $96.78

April $691,000 32,100 5,020 $21.53 $137.65

May $860,000 47,150 8,400 $18.23 $102.38

June $666,600 30,500 4,900 $21.86 $136.04

Graph the hospitals overhead costs against the number of patient days. Note: This is for your benefit so that you can answer Question 3; you do not need to submit this graph as part of the assignment.

Graph the hospitals overhead costs against nursing hours. Note: This is for your benefit so that you can answer Question 3; you do not need to submit this graph as part of the assignment.

Question 3. Do the data appear to be straight forward or do you see any potential problems with the data?Please explain.