OBJECTIVE 2456 sout cost behavior that you would like to have? Explain. Problem 3-28 HIGH-LOW METHOD, SCATTERPLOT, REGRESSION Weber Valley Regional Hospital has collected data on all of its activities for the past 16 months. Data for cardiac nursing care follow: Y x Cost Hours of Nursing Care May 2010 $59,600 1,400 June 2010 57,150 1,350 July 2010 61,110 1,460 August 2010 65,800 1,600 (continued) Chapter 3 Cost Behavior Y Cost x Hours of Nursing Care September 2010 69,500 1,700 October 2010 64,250 1,550 November 2010 52,000 1,200 December 2010 66,000 1,600 January 2011 83,000 1,800 February 2011 66,550 1,330 March 2011 79,500 1,700 April 2011 76,000 1,600 May 2011 June 2011 68,500 1,400 73,150 1,550 July 2011 August 2011 73,175 1,505 66,150 1,290 Required: 1. Using the high-low method, calculate the variable rate per hour and the fixed cost for the nursing care activity. 125

OBJECTIVE 2456 sout cost behavior that you would like to have? Explain. Problem 3-28 HIGH-LOW METHOD, SCATTERPLOT, REGRESSION Weber Valley Regional Hospital has collected data on all of its activities for the past 16 months. Data for cardiac nursing care follow: Y x Cost Hours of Nursing Care May 2010 $59,600 1,400 June 2010 57,150 1,350 July 2010 61,110 1,460 August 2010 65,800 1,600 (continued) Chapter 3 Cost Behavior Y Cost x Hours of Nursing Care September 2010 69,500 1,700 October 2010 64,250 1,550 November 2010 52,000 1,200 December 2010 66,000 1,600 January 2011 83,000 1,800 February 2011 66,550 1,330 March 2011 79,500 1,700 April 2011 76,000 1,600 May 2011 June 2011 68,500 1,400 73,150 1,550 July 2011 August 2011 73,175 1,505 66,150 1,290 Required: 1. Using the high-low method, calculate the variable rate per hour and the fixed cost for the nursing care activity. 125

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter3: Cost Behavior And Cost Forecasting

Section: Chapter Questions

Problem 4MCQ: In the cost formula, the term 128,000,000 a. is the total variable cost. b. is the dependent...

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Weber Valley Regional Hospital has collected data on all of its activities for the past 16 months. Data for cardiac nursing care follow: Required: 1. Using the high-low method, calculate the variable rate per hour and the fixed cost for the nursing care activity. 2. Run a regression on the data, using hours of nursing care as the independent variable. Predict cost for the cardiac nursing care for September Year 2 if 1,400 hours of nursing care are forecast. Evaluate the regression equation. How comfortable are you with the predicted cost for September Year 2? 3. Upon looking into the events that happened at the end of Year 1, you find that the cardiology ward bought a cardiac-monitoring machine for the nursing station. Administrators also decided to add a new supervisory position for the evening shift. Monthly depreciation on the monitor and the salary of the new supervisor together total 10,000. Now, run two regression equations, one for the observations from Year 1 and the second using only the observations for the eight months in Year 2. Discuss your findings. What is your predicted cost of the cardiac nursing care activity for September Year 2?
4. The administrator of ABC Hospital would like to know the relationship between the costs of admitting in relation to the number of patients being admitted and determine the cost formula. The following are the related data for the past five months that will be used determine such cost formula.Month |# of Patients Admitted |Admitting CostsJanuary 1,800 P 14,700February 1,900 P 15,200March 1,700 P 13,700April 1,600 P 14,000May 1,500 P 14,300The controller suggested to use the high-low method approach to derive for the cost formula. If the controller’s suggestion is to be followed:What would be the prediction formula/cost formula?
In the cost formula, the term 12,000 a. is the variable rate. b. is the dependent variable. c. is the independent variable. d. is the intercept. e. cannot be determined from the above formula. Use the following information for Multiple-Choice Questions 3-4 through 3-7: The following cost formula was developed by using monthly data for a hospital. Total Cost = 128,000,000 + (12,000 Number of Patient Days)
2. The administrator of ABC Hospital would like to know the relationship between the costs of admitting in relation to the number of patients being admitted and determine the cost formula. The following are the related data for the past five months that will be used determine such cost formula.Month | # of Patients Admitted |Admitting CostsJanuary 1,800 P 14,700February 1,900 P 15,200March 1,700 P 13,700April 1,600 P 14,000May 1,500 P 14,300The controller suggested to use the high-low method approach to derive for the cost formula. If the controller’s suggestion is to be followed:How much would be the total fixed costs?
Standard cost sheet -Short term patients Standard Price Standard Usage Standard Cost Direct Materials $10 9 $ 90 Direct Labor $16 2.5 $40 Variable overhead $30 2.5 $75 Fixed overhead $40 2.5 $100 Total standard unit cost $305 1. Compute the LEV for the long-term patients and state whether it is favorable or unfavorable
Suppose that a surgical ward has gathered the following information for four nursing activities and two types of patients: Treating patients Providing hygienic care Responding to requests Monitoring patients Required: Normal Intensive Driver Normal Treatments Intensive Hygienic hours Requests Monitoring hours Patient Category Normal Intensive 7,900 1. Determine the total nursing costs assigned to each patient category. Costs Assigned per patient day per patient day 4,800 32,000 6,000 8,000 19,100 80,000 72,000 Activity Rate $4.00 5.00 2. Output is measured in patient days. Assuming that the normal patient category uses 8,000 patient days and the intensive patient category uses 6,400 patient days, calculate the nursing cost per patient day for each type of patient. Round your answers to the nearest cent. 2.00 3.00
Standard cost sheet -Short term patients Standard Price Standard Usage Standard Cost Direct Materials $10 9 $ 90 Direct Labor $16 2.5 $40 Variable overhead $30 2.5 $75 Fixed overhead $40 2.5 $100 Total standard unit cost $305 1. Compute the LRV for the short-term patients and state whether its favorable or not
To compute a daily rate that reflected the difference in demands, patients were placed in three categories according to illness severity, and the following annual data were collected: Cost of Activity Activity Driver $ 546,780 2,132,200 441,630 4,185,700 $7,306,310 Activity Lodging Monitoring Feeding Nursing care Total The demands associated with patient severity are also provided: Severity Patient Days Monitoring Hours Nursing Hours High Medium Low 7,170 10,180 3,680 $ Patient days Monitoring hours used Patient days Nursing hours High severity Medium severity Low severity 15,170 12,030 3,260 133,100 72,900 14,300 Required: 1. Suppose that the costs of daily care are assigned using only patient days as the activity driver (which is also the measure of output). Compute the daily rate using this unit-based approach of cost assignment. If required, round your answer to the nearest cent. per day 2. Compute activity rates using the given activity drivers (combine activities with the same…
Pareto chart and cost of quality report for a service company The administrator of Liberty Hospital has been asked to perform an activity analysis of the emergency room (ER). The ER activities include cost of quality and other patient care activities. The lab tests and transportation are hospital services external to the ER for determining external failure costs. The result of the activity analysis is summarized as follows: Activities Activity Cost Patient registration $ 6,500 Verifying patient information 9,700 Assigning patients 13,000 Searching/waiting for doctor 9,200 Doctor exam 4,900 Waiting for transport 17,500 Transporting patients 16,200 Verifying lab orders 14,500 Searching for equipment 8,200 Incorrect labs 11,300 Lab tests 17,000 Counting supplies 19,000 Looking for supplies 8,200 Staff training 4,800 Total $160,000 a. b. c. d. Classify the…
Standard cost sheet -Short term patients Standard Price Standard Usage Standard Cost Direct Materials $10 9 $ 90 Direct Labor $16 2.5 $40 Variable overhead $30 2.5 $75 Fixed overhead $40 2.5 $100 Total standard unit cost $305 1. Compute the MPV for the short-term patients and state whether its favorable or not.
In the cost formula, the term 128,000,000 a. is the total variable cost. b. is the dependent variable. c. is the variable rate. d. is the total fixed cost. e. cannot be determined from the above formula. Use the following information for Multiple-Choice Questions 3-4 through 3-7: The following cost formula was developed by using monthly data for a hospital. Total Cost = 128,000,000 + (12,000 Number of Patient Days)
A Community health clinic's costs are shown below. What is total average cost per patient? 4,824 Patients Total variable costs $6,375 Total fixed costs ? Variable cost per ? patient Fixed cost per patient $2.40 Total average cost per patient ? Round your answer to two decimal places. Do not round any intermediate calculations.