Suppose that General Hospital, a not-for-profit acute care facility, has estimated the following costs for its inpatient services:

The hospital expects to have 15,000 inpatient days next year.

a. What is the hospital’s underlying cost structure?

b. What are the hospital’s expected total costs?

c. What are the hospital’s estimated total costs at 12,500 inpatient days? At 17,500 inpatient days?

d. What is the average cost per inpatient day at 12,500, 15,000, and 17,500 inpatient days?

Transcribed Image Text:

Fixed costs $10,000,000 Variable cost per inpatient day $200