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Table 1: Iatalora Hospital - Fixed and Variable Costs (a) Variable Costs (VC) per patient (b) Fixed Costs (FC) per year Personnel $150 Rent $100,000

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Table 1: Iatalora Hospital - Fixed and Variable Costs (a) Variable Costs (VC) per patient (b) Fixed Costs (FC) per year Personnel $150 Rent $100,000 Supplies $20 Administration $120,000 Laundry $30 Other $80,000 Other $50 (a) What are the fixed, variable, total, and average costs per patient for volumes of 100, 500, 1,500, 2,500 and 3,000? (b) Draw a graph of the average cost per patient. (C) Suppose an outside organization offers to send Iatalora 500 patients per year but only offers to pay $300 for each one. Should the hospital agree to this agreement? It currently has 2,500 patients per year and has the capacity to easily handle 3,000

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