To help with the decision, Mark compiled the Phase 4 hospital costs of 12 recent liver transplant patients. In reviewing these data, shown in Table 1, Mark noted that a total average cost of $119,805 for 19 days average length of stay (LOS) translates to a

To help in the analysis, Mark has indicated that approximately 60 percent of nursing, ancillary, operating room, and laboratory costs are fixed. The remaining costsradiology, drug, and other servicesare predominantly variable. See Excel spreadsheet for Phase 4 Hospital Costs.

Questions

1. What is the estimate of the marginal cost of the Phase 4 hospital services, given the case assumption that 60 percent of the designated costs are fixed and the remaining costs are variable?

					Phase 4 Hospital Costs
			Total	Nursing	Ancillary	OR	Lab	Radiology	Drug	Other
Patient	Age	LOS	Costs	Cost	Cost	Cost	Cost	Cost	Cost	Costs
Average	47	19	$119,805	$13,314	$53,245	$5,906	$8,097	$1,389	$15,268	$22,586