For the Asante teaching hospital case. Why are none of the overhead costs fixed? All of the overhead costs are tied to a cost driver including number of patients. I would think some of the utilities, Insurance, grounds keeping, Security, etc would still have a value even if the number of patients is zero, meaning there is a fixed portion? Can you help me understand why a fixed portion was not assumed for overhead?

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Youre right in most realworld scenarios overhead costs typically have a fixed and variable component Here are some possible reasons why the Asante tea... View the full answer