# Question: Deepa Dalal opened a free standing radiology clinic She had anticipated

Deepa Dalal opened a free-standing radiology clinic. She had anticipated that the costs for the radiological tests would be primarily fixed, but she found that costs increased with the number of tests performed. Costs for this service over the past nine months are as follows:

Required:

1. Prepare a scattergraph based on the preceding data. Use cost for the vertical axis and number of radiology tests for the horizontal axis. Based on an examination of the scattergraph, does there appear to be a linear relationship between the cost of radiology service and the number of tests?

2. Compute the cost formula for radiology services using the high-low method.

3. Calculate the predicted cost of radiology services for October for 3,500 tests using the formula found in Requirement 2.

Required:

1. Prepare a scattergraph based on the preceding data. Use cost for the vertical axis and number of radiology tests for the horizontal axis. Based on an examination of the scattergraph, does there appear to be a linear relationship between the cost of radiology service and the number of tests?

2. Compute the cost formula for radiology services using the high-low method.

3. Calculate the predicted cost of radiology services for October for 3,500 tests using the formula found in Requirement 2.

## Answer to relevant Questions

Refer to the data in Exercise 3.17. In Exercise 3.17 Required: 1. Compute the cost formula for radiology services using the method of least squares. 2. Using the formula computed in Requirement 1, what is the predicted cost ...Ginnian and Fitch, a regional accounting firm, performs yearly audits on a number of different for-profit and not-for-profit entities. Two years ago, Luisa Mellina, Ginnian’s partner in charge of operations, became ...A delivery company is implementing a system to compare the costs of purchasing and operating different vehicles in its fleet. Truck 415 is driven 125,000 miles per year at a variable cost of $0.13 per mile. Truck 415 has a ...Comparison of Regression Equations Friendly Bank is attempting to determine the cost behavior of its small business lending operations. One of the major activities is the application activity. Two possible activity drivers ...Pohlman Company makes aircraft engines. Pohlman has noticed that, in general, each new engine design is subject to an 80 percent learning rate. Assume that the first unit produced takes 500 hours, and direct labor is paid an ...Post your question