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1-Explain the difference between fixed, variable, and semivariable costs. Give a

ID: 2727159 • Letter: 1

Question

1-Explain the difference between fixed, variable, and semivariable costs. Give an example of each.

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Option 1: Sources of Revenue

The 2010 HCA 10K report is located within the Securities Exchange Commission at the following Web site:

http://www.sec.gov/Archives/edgar/data/860730/000095012311015233/g25905e10vk.htm

Review the “Sources of Revenue” section beginning on page 5 and ending on page 15.

Complete the following:

Write a 2–3-page analysis of the sources of revenue.

Describe the advantages and disadvantages of each source of revenue from the viewpoint of a health care manager.

Determine the fixed, variable, and semivariable costs.

Use the financial reports (beginning on page 52) within the document to help you. Be sure to exhibit comprehension of the various payment models in your analysis.

Option 2: Hospital Adjusted Expenses

Review the 2010 HCA Annual Investment by State Report at:

http://hcagovernmentrelations.com/utility/forms/investment-by-state2010.pdf

Complete the following:

Pick 6 states to compare uncompensated care expenses.

Develop a graph to display your results.

As a healthcare manager within one of HCA’s facilities, suggest ways to decrease the total uncompensated care amount.

Write a 2–3-page analysis of your comparison.

Use the financial reports within the document to help you. Be sure to exhibit comprehension of the various payment models in your analysis.

Include all required tasks for this assignment in a Word document.

Explanation / Answer

Answer:1 Fixed Cost is the cost which remains constant or unaffected by variations in the volume of output within a given period of time. Example: Rent or rates, Insurance charges, etc.

Variable Cost is the cost which varies directly in proportion with every increase or decrease in the volume of output with a given a period of time. Example: Wages paid to labours, cost of direct material, consumable stores, etc.

Semi-variable Cost is the cost which is neither fixed nor variable in nature. These remain fixed at certain level of operations while may vary proportionately at other levels of operations. Example: maintenance cost, repairs, power, etc.