Part 1

The administrator of Azalea Hills Hospital would like a cost formula linking the administrative

costs involved in admitting patients to the number of patients admitted during a month. The Admitting Departments costs and the number of patients admitted during the immediately preceding eight months are given in the following table:

	# of Patient Days	Admitting Dept Costs
Month
May	1,800	$14,700
June	1,900	$15,200
July	1,700	$13,700
August	1,600	$14,000
September	1,500	$14,300
October	1,300	$13,100
November	1,100	$12,800
December	1,500	$14,600

Use the high-low method to estimate the fixed and variable component of admitting cost.

Use the cost formula you developed in part a to predict admitting cost for 1,400 patient days.