Please solve the below problems ASAP for MBA 560 financial and managerial accounting.

PROBLEM #1

Jaden Austen is the Chief Operating Officer at Union 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:

Hospital	Nursing	Number of	Overhead Cost	Overhead Cost
Month	Overhead Costs	Hours	Patient Days	per Nursing Hour	per Patient Day
July . . . . . . . .	$476,000	24,000	3,720	$19.83	$127.96
August . . . . . .	$512,000	26,000	4,320	$19.69	$118.52
September . .	$424,000	20,000	4,220	$21.20	$100.47
October . . . . .	$448,000	22,500	3,470	$19.91	$129.11
November . . .	$555,000	30,000	5,690	$18.50	$97.54
December . . .	$431,000	22,000	3,210	$19.59	$134.27

Requirement 1. Are the hospital's overhead costs fixed, variable, or mixed? Explain.

The hospital's overhead costs appear to be a

fixed

mixed

variable

cost. If it were a

fixed

mixed

variable

cost, it would remain constant in total each month. If it were a

fixed

mixed

variable

cost, it would remain constant on a per unit (of activity) basis. Both of the hospital's overhead cost per nursing hour and overhead cost per patient day

are fixed

vary

with volume.

Requirements

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 24,500 nursing hours are predicted for the month.

6. Mr. Austen 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 shown below

Regression Statistics
Multiple R	0.984895
R Square	0.970018
Adjusted R Square	0.962523
Standard Error	9,883.836352
Observations	6

Anova
	df	SS	MS	F	Significance F
Regression	1	12,642,572,449	12,642,572,449	129.414926	0.000341
Residual	4	390,760,884	97,690,221
Total	5	13,033,333,333

	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%
Intercept	131,004.69	30,448.454	4.303	0.013	46,466.228	215,543.149
X Variable 1	14.26	1.253	11.376	0	10.777	17.735

If 24,500 nursing hours are predicted for the month, what is the total predicted hospital overhead?

7. Mr. Austen then ran the regression analysis using number of patient days as the cost driver. The Excel output from the regression is shown here:

Regression Statistics
Multiple R	0.818166
R Square	0.669396
Adjusted R Square	0.586745
Standard Error	32,820.99359
Observations	6

Anova
	df	SS	MS	F	Significance F
Regression	1	8,724,462,852	8,724,462,852	8.099072	0.046589
Residual	4	4,308,870,482	1,077,217,620
Total	5	13,033,333,334

	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%
Intercept	280,775.96	69,320.327	4.05	0.015	88,311.882	473,240.047
X Variable 1	47.15	16.568	2.846	0.047	1.151	93.153

If 3,610 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.

PROBLEM #2

Carmichael Industries is in the process of analyzing its manufacturing overhead costs. Carmichael Industries is not sure if the number of units produced or the number of direct labor (DL) hours is the best cost driver to use for predicting manufacturing overhead (MOH) costs.

The following information is available:

			MOH	MOH
	Manufacturing	Direct		Cost per	Cost per
	Overhead	Labor	Units	DL	Unit
Month	Costs	Hours	Produced	Hour	Produced
July . . . . . . . . . .	$475,000	25,500	3,640	$18.63	$130.49
August . . . . . . . .	$518,000	28,000	4,350	$18.50	$119.08
September . . . .	$469,000	22,000	4,260	$21.32	$110.09
October . . . . . . .	$460,000	22,800	3,420	$20.18	$134.50
November . . . . .	$586,000	31,000	5,800	$18.90	$101.03
December . . . . .	$450,000	22,200	3,280	$20.27	$137.20

Requirement 1. Determine if the manufacturing overhead costs are fixed, variable, or mixed?

Carmichael's manufacturing overhead appears to be a

fixed

mixed

variable

cost. If it were a

fixed

mixed

variable

cost, it would remain constant in total each month. If it were a

fixed

mixed

variable

cost, it would remain constant on a per unit (of activity) basis. Both

Carmichael's MOH per DL hour and MOH per unit

are fixed

vary

with volume.

Requirements

1.	Are manufacturing overhead costs fixed, variable, or mixed? Explain.
2.	Graph Carmichael Industries' manufacturing overhead costs against DL hours.
3.	Graph Carmichael Industries' manufacturing overhead costs against units produced.
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 Carmichael Industries' manufacturing overhead cost equation using DL hours as the cost driver. Assume that management believes that all data is accurate and wants to include all of it in the analysis.
6.	Estimate manufacturing overhead costs if Carmichael Industries incurs 26,000 DL hours in January.