I don't understand this cost report at of, exclaimed John Corter, the newly appointed administrator of AngelCore General Hospital. Our administrative costs in the new pediatrics clinic are difficult to understand. One month the report shows $16600, and the next month it's 532200. What's going on Carter's question was posed to Alice Baines the hospitals Occountant. The main problem is that the clinic has experienced some widely varying patient loads in its first year of operation. Baines replied. There seems to be some confusion in the public's mind about what services we offer in the clinic. When do they come to the clinic When do they go to the outpatient department That sort of thing. As the patient load has varied, we've frequently changed our clinic administrative staffing. Also, we have found that the number of emergency procedures varies each month and emergency procedures cause additional staff costs Corter continued to puzzle over the report. Could you put some data together, Alice. so we can see how this cost behaves over a range of patient loads You have it this afternoon'. Boines responded. She set to work right away and gathered the folowing data: Month January February March April May June July August September October November December Number of emergency procedures Pofient lood Administrative cost 20 2800 $27.800 22 1000 14.000 10 800 12.000 20 2000 20.000 24 2600 23,800 28 1800 18.400 16 2200 20.400 14 600 8.200 24 1400 18.800 24 2400 22 200 36 1200 16.600 32 3000 32.200 Baines does not bolleve that the first year's widey fluctuating patient lood will be experienced again in the future. She has estimated that the clinic's relevant range of monthly activity in the future will be 600 10 1 200 patients. REQUIRED: Show All working 1. Use the high-low method to estimate the behavior of the cines administrative costs, based on patient load within the relevant range. Use on equation to express the results of this estimation method 2. What is your prediction of the clinic's administrative cost during a month when 800 patients visit the hospital (2) 3. Would you use the cost function from requirement to predict the clinic's administrative cost for 300 patient visits Explain your answer. [2] 4. Identity the number of emergency procedures, patient lood and administrative costs for each month within the relevant range om 5. Does the inclusion of the additional cost driver of emergency procedures Improve the model Explain your answer. 18