Weber Valley Regional Hospital has collected data on all of its activities for the past 16...
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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: May Year 1 June Year 1 July Year 1 August Year 1 September Year 1 October Year 1 November Year 1 December Year 1 January Year 2 February Year 2 March Year 2 April Year 2 May Year 2 June Year 2 July Year 2 August Year 2 Y Cost $59,600 57,150 61,110 65,800 69,500 64,250 52,000 66,000 83,000 66,550 79,500 76,000 68,500 73,150 73,175 66,150 X Hours of Nursing Care 1,400 1,350 1,460 1,600 1,700 1,550 1,200 1,600 1,800 1,330 1,700 1,600 1,400 1,550 1,505 1,290 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? Weber Valley Regional Hospital has collected data on all of its activities for the past 16 months. Data for cardiac nursing care follow: May Year 1 June Year 1 July Year 1 August Year 1 September Year 1 October Year 1 November Year 1 December Year 1 January Year 2 February Year 2 March Year 2 April Year 2 May Year 2 June Year 2 July Year 2 August Year 2 Y Cost $59,600 57,150 61,110 65,800 69,500 64,250 52,000 66,000 83,000 66,550 79,500 76,000 68,500 73,150 73,175 66,150 X Hours of Nursing Care 1,400 1,350 1,460 1,600 1,700 1,550 1,200 1,600 1,800 1,330 1,700 1,600 1,400 1,550 1,505 1,290 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?
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Answer rating: 100% (QA)
1 Using the HighLow Method Calculate the Variable Rate per Hour and the Fixed Cost for the Nursing Care Activity The highlow method is a cost estimation technique used to calculate the variable rate p... View the full answer
Related Book For
Cornerstones of Cost Management
ISBN: 978-1285751788
3rd edition
Authors: Don R. Hansen, Maryanne M. Mowen
Posted Date:
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