Question
Month Hospital Overhead Cost Nursing Hrs # of Patient Days Overhead Cost Per Nursing Hrs Overhead cost Per Patient Day July 965,000 51,000 8,000 18.92
Month | Hospital Overhead Cost | Nursing Hrs | # of Patient Days | Overhead Cost Per Nursing Hrs | Overhead cost Per Patient Day |
---|---|---|---|---|---|
July | 965,000 | 51,000 | 8,000 | 18.92 | 120.63 |
August | 1,000,000 | 53,000 | 9,000 | 18.86 | 111.11 |
September | 830,000 | 38,000 | 8,750 | 21.84 | 94.86 |
October | 925,000 | 43,000 | 7,000 | 21.51 | 132.14 |
November | 1,100,000 | 65,000 | 12,000 | 16.92 | 91.67 |
December | 900,000 | 42,000 | 7,900 | 21.42 | 113.92 |
The hospital ran a regression analysis using nursing hours as the cost driver to predict total hospital overhead costs. The regression analysis produced the following data:
Intercept: 346245
Slope: 12.81796
RSQ: 0.909311
A.) Round the variable portion of the regression equation formula to two decimal places. Based on the regression equation formula, what will the predicted total hospital overhead costs be if 54,000 nursing hours are expended during a month?
The hospital then ran a regression analysis using number of patient days as cost driver. The regression analysis produced the following data:
Intercept: 559764
Slope: 47.970926
RSQ: 0.563496482
B.) Again, round the variable portion of the regression equation to two decimal places. If 9,500 patient days are predicted for a month, what is the total predicted hospital overhead costs using the regression equation?
C.) Which regression equation, the one using nursing hours as the cost driver or the one using patient days as the cost driver, produces the most accurate correlation (best explanation of) the predicted hospital overhead costs. How do you know that your answer is correct? In other words, justify your answer.
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