Suppose that a hospital emergency department classifies patients, based on the resource intensiveness, into categories 1, 2, or 3. The variable costs associated with a type 1 patient are $200, with a type 2 patient are $500, and with a type 3 patient are $800. About half of all patients are type 1, and the remaining patients split evenly between types 2 and 3. 

What is the appropriate variable cost to use for a break-even analysis?

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To calculate the appropriate variable cost for a break even analysis we need to c View the full answer