Questions

4. What would be a reasonable estimate of total cost for January of Year 2?

5. With only a 5 percent risk of being wrong, would you accept without investigation a January of Year 2 actual cost figure of $13,950?

Transcribed Image Text:

Case 9.1: ABC Clinic Key concept: Estimating fixed and variable costs via simple regression BC Clinic provides a variety of basic medical services in a shopping mall location. It has extended hours on evenings and weekends, which make it a convenient place to receive basic medical care. Susanna Shuman, clinic manager, has been analyzing the clinic's financial data to try to figure out how she might improve the clinic's profitability. During the first year of its operation, the clinic, on average, charged a little over $100 per visit and was barely profitable. Susanna obtained the following monthly costs and patient numbers for Year 1: A Month Patients Total Cost January 100 $10,000 February 105 $11,000 March 110 $10,500 April 4 112 $11,500 May 110 $11,000 June 6. 114 $11,500 July 7 120 $13,000 August 8. 121 $12,500 September 9. 115 $12,000 October $12,500 10 131 November 11 125 $12,000 December 12 126 $12,500 Totals for year 1,389 $140,000 Case 9.1: ABC Clinic Key concept: Estimating fixed and variable costs via simple regression BC Clinic provides a variety of basic medical services in a shopping mall location. It has extended hours on evenings and weekends, which make it a convenient place to receive basic medical care. Susanna Shuman, clinic manager, has been analyzing the clinic's financial data to try to figure out how she might improve the clinic's profitability. During the first year of its operation, the clinic, on average, charged a little over $100 per visit and was barely profitable. Susanna obtained the following monthly costs and patient numbers for Year 1: A Month Patients Total Cost January 100 $10,000 February 105 $11,000 March 110 $10,500 April 4 112 $11,500 May 110 $11,000 June 6. 114 $11,500 July 7 120 $13,000 August 8. 121 $12,500 September 9. 115 $12,000 October $12,500 10 131 November 11 125 $12,000 December 12 126 $12,500 Totals for year 1,389 $140,000

Answer rating: 100% (QA)

4 Wht wuld be resnble estimte f the ttl st fr Jnury f Yer 2 Exeted number f t... View the full answer