Question
Estimating the variable and fixed cost portion of a mixed cost. The facilities housekeeping department at St. Luke's Hospital has determined that the appropriate cost
Estimating the variable and fixed cost portion of a mixed cost.
The facilities housekeeping department at St. Luke's Hospital has determined that the appropriate cost driver for housekeeping costs is patient-days. There are 10,000 patient-days per month. The department has collected the following accounts for the past month:
Monthly Housekeeping Expenses Amount
Supervisors' Salaries Expense $10,000
Depreciation ExpenseScrubbing Machines $5,000
Cleaning Supplies Expense$7,000
Hourly Workers' Wages Expense $100,000
Insurance ExpenseScrubbing Machines $2,000
Required:
Estimate the cost function using the account analysis method.
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