How did we get 120% ?

Columbia Hospital for Women is planning to expand its labor and delivery room facilities. Although variable costs per patient will remain unchanged, fixed costs will increase by 20 percent. Last year's costs are below.

Variable costs $50 per patient

Fixed costs $20,000 per month

Calculate the future total cost assuming 100 patients are expected each month

answer is : TC = F + VX TC = ($20,000 120%) + $50(100) TC = $29,000