P6-62A (similar to) Question Help Billie Cole is the Chief Operating Officer at Top Hospital in Atlanta, Georgia. He is analyzing the hospital's overhead costs but is not sure whether nursing hours or the number of patient days would be the best cost driver to use for predicting the hospital's overhead. He has gathered the following information for the last six months of the most recent year: 3(Click the icon to view the information.) Read the requirements. Data Table A Requirements h mo Jerhead Nursing Hours 25,000 26,700 Hospital Month Overhead Costs July ........$ 485,000 August ..... $ 540,000 September .. $ 420,000 October ..... $ 462,000 November ... $ 579,000 December ... $ 455,000 Number of Overhead Cost Overhead Cost Patient Days per Nursing Hour per Patient Day 3,800 $ 19.40 $ 127.63 4,360 $ 20.22 $ 123.85 4,210 $ 21.00 $ 99.76 3,450 $ 21.10 $ 133.91 5,600 $ 18.09 $ 103.39 3,270 $ 22.30 $ 139.14 20,000 21,900 32,000 20,400 1. Are the hospital's overhead costs fixed, variable, or mixed? Explain. 2. Graph the hospital's overhead costs against nursing hours. 3. Graph the hospital's overhead costs against the number of patient days. 4. Do the data appear to be sound or do you see any potential data problems? Explain. 5. Use the high-low method to determine the hospital's cost equation using nursing hours as the cost driver. Predict total overhead costs if 25,500 nursing hours are predicted for the month. 6. Cole runs a regression analysis using nursing hours as the cost driver to predict total hospital overhead costs. The Excel output from the regression analysis is as follows: (Click the icon to view the regression analysis.) If 25,500 nursing hours are predicted for the month, what is the total predicted hospital overhead? 7. Cole then ran the regression analysis using number of patient days as the cost driver. The Excel output from the regression is shown here: (Click the icon to view the regression analysis.) If 3,680 patient days are predicted for the month, what is the total predicted hospital overhead? 8. Which regression analysis (using nursing hours or using number of patient days as the cost driver) produces the best cost equation? Explain your answer. Print Done Print Done Click to select your answer(s) and then click Check Answer. P6-62A (similar to) Question Help Billie Cole is the Chief Operating Officer at Top Hospital in Atlanta, Georgia. He is analyzing the hospital's overhead costs but is not sure whether nursing hours or the number of patient days would be the best cost driver to use for predicting the hospital's overhead. He has gathered the following information for the last six months of the most recent year: 3(Click the icon to view the information.) Read the requirements. Data Table A Requirements h mo Jerhead Nursing Hours 25,000 26,700 Hospital Month Overhead Costs July ........$ 485,000 August ..... $ 540,000 September .. $ 420,000 October ..... $ 462,000 November ... $ 579,000 December ... $ 455,000 Number of Overhead Cost Overhead Cost Patient Days per Nursing Hour per Patient Day 3,800 $ 19.40 $ 127.63 4,360 $ 20.22 $ 123.85 4,210 $ 21.00 $ 99.76 3,450 $ 21.10 $ 133.91 5,600 $ 18.09 $ 103.39 3,270 $ 22.30 $ 139.14 20,000 21,900 32,000 20,400 1. Are the hospital's overhead costs fixed, variable, or mixed? Explain. 2. Graph the hospital's overhead costs against nursing hours. 3. Graph the hospital's overhead costs against the number of patient days. 4. Do the data appear to be sound or do you see any potential data problems? Explain. 5. Use the high-low method to determine the hospital's cost equation using nursing hours as the cost driver. Predict total overhead costs if 25,500 nursing hours are predicted for the month. 6. Cole runs a regression analysis using nursing hours as the cost driver to predict total hospital overhead costs. The Excel output from the regression analysis is as follows: (Click the icon to view the regression analysis.) If 25,500 nursing hours are predicted for the month, what is the total predicted hospital overhead? 7. Cole then ran the regression analysis using number of patient days as the cost driver. The Excel output from the regression is shown here: (Click the icon to view the regression analysis.) If 3,680 patient days are predicted for the month, what is the total predicted hospital overhead? 8. Which regression analysis (using nursing hours or using number of patient days as the cost driver) produces the best cost equation? Explain your answer. Print Done Print Done Click to select your answer(s) and then click Check