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B 14 01:00:39 Mountain View Hospital in Alberta has just hired a new chief administrator, who is anxious to employ sound management and planning
B 14 01:00:39 Mountain View Hospital in Alberta has just hired a new chief administrator, who is anxious to employ sound management and planning techniques in the business affairs of the hospital. Accordingly, she has directed her assistant to summarize the cost structure existing in the various departments to secure data for planning purposes. The assistant is unsure how to classify the utilities costs in the radiology department, since these costs do not exhibit either strictly variable or strictly fixed cost behaviour. Utilities costs are very high in the department due to a CT scanner that draws a large amount of power and is kept running at all times. The scanner cannot be turned off due to the long warm-up period required for its use. When the scanner is used to scan a patient, it consumes an additional burst of power. The assistant has accumulated the following data on utilities costs and use of the scanner since the first of the year: eBook Number of Month Scans Utilities Cost January 53 $ 4,770 February 111 7,340 March 113 8,040 April 176 11,310 May 213 14,910 June 136 9,280 July 286 16,130 August 173 12,740 September 223 October 193 15,750 14,020 The chief administrator has informed her assistant that the utilities cost is probably a mixed cost that will have to be broken down into its variable and fixed cost elements by use of a scattergraph. The assistant feels, however, that if an analysis of this type is necessary. the high-low method should be used because it is easier and quicker to use than other methods. The controller has suggested that there might be a better approach. Required: 1. Using the high-low method, estimate a cost formula for utilities. Express the formula in the form Y= a + bx. (The variable rate should loulations Round the "Fixed cost" to the nearest dollar amount
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