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please weite two paragroahs identifing any inefficiencies that may be contributing to the fluctuation in administrative costs (Note: Instructors who wish to cover all three
please weite two paragroahs identifing any inefficiencies that may be contributing to the fluctuation in administrative costs (Note: Instructors who wish to cover all three cost-estimation methods with the same data set may assign this case in conjunction with the following case.) "I don't understand this cost report at all," exclaimed Jeff Mahoney, the newly appointed administrator of Mountainview General Hospital. Our administrative costs in the new pediatrics clinic are all over the map. One month the report shows $8,300, and the next month it's $16,100. What's going on?" Mahoney's question was posed to Megan McDonough, the hospital's director of Cost Management. "The main problem is that the clinic has experienced some widely varying patient loads in its first year of operation. 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 emergency room? That sort of thing. As the patient load has varied, we've frequently changed our clinic administrative staffing." Mahoney continued to puzzle over the report. "Could you pull some data together, Megan, so we can see how this cost behaves over a range of patient loads?" "You'll have it this afternoon," McDonough responded. Later that morning, she gathered the following data: IcDonough does not believe the first year's widely fluctuating patient load will be xperienced again in the future. She has estimated that the clinic's relevant range of 1onthly activity in the future will be 600 to 1,200 patients
please weite two paragroahs identifing any inefficiencies that may be contributing to the fluctuation in administrative costs
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