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Graceland Hospital is analyzing its overhead costs. It is not clear whether the number of patient days or nursing hours would be the best cost

Graceland 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 Overhead Costs

Nursing Hours

Number of Patient Days

Overhead Cost Per Nursing Hour

Overhead Cost Per Patient Day

January

$703,000

34,400

5,600

$20.44

$125.54

February

$802,000

37,400

6,600

$21.44

$121.52

March

$619,000

29,300

6,500

$21.13

$95.23

April

$692,000

32,300

5,100

$21.42

$135.69

May

$863,000

47,300

8,500

$18.25

$101.53

June

$668,600

30,750

5,000

$21.74

$133.72

Graph the hospitals overhead costs against the number of patient days. Note: This is for your benefit so that you can answer Question 3.

Graph the hospitals overhead costs against nursing hours. Note: This is for your benefit so that you can answer Question 3.

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

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