CASE STUDY 2
From this activity, you are going to solve an instance out of the textbook, Managerial Accounting. The intent of the watch case Studies is usually to show how you can analyze module related bureaucratic accounting economical data within an organizations setting. For this example, you will be able to demonstrate your capacity to correctly calculate costs using the high-low approach and least-square method. Your next Case Study will probably be Case 6-49: Comparing Multiple Cost Appraisal Methods: Integrity. This case can be found the end of Chapter 6. The primary focus of this case analyze is the understanding and application of fixed costs, variable costs, the least-squares method, as well as the high-low approach. Your assignment is to total the requirements determined for Circumstance 6-49: 1-4.
1 . High-low method: Varying administrative expense per affected person = Total cost in 1, five-hundred patients=$16, 95
Variable expense at 1, 500 patients=15, 000
Fixed cost per month=$1, 95
Cost formula: Total month to month administrative price = $1, 100 + $10X, where X is a number of patients for the month. The variable expense per affected person is $10,50.
a. Changing cost every patient=. 957909 or $12 rounded.
m. R2 or perhaps correlation with the coefficient is definitely. 91759. Because it is very near one it implies that my model is a good one. several. Memorandum
Particular date: November three or more, 2013
To: Jeffrey Mahoney, Administrator
Via: Valerie Delarosa
Subject: Expense comparison of estimations for center administrative Using three alternate cost-estimation ways to estimate the pediatric clinic's administrative cost behavior it can be determined that in the first year the fluctuation was too superb. The benefits of these three approaches will be shown below. Be encouraged in every formula, X denotes the number of patients within a month. (a)Least-squares regression method: Total regular monthly administrative price = $2, 671 + $7. 81X (b)High-low method: Total month to month administrative expense = $1, 100 + $10X (c)Scatter Diagram and Visual-fit method: Total month to month administrative expense =...