budgeting & finance please provide formula(s) as work needs to be transfered to
ID: 2784469 • Letter: B
Question
budgeting & finance
please provide formula(s) as work needs to be transfered to excel
Cost Behavior: Problem 4
Hopeful Hospital processes its own laboratory specimens. The Vice President for support services wants to determine the fixed and variable components of services provided and decides to use the high low method and operating data from the past six months. Determine the variable cost and the fixed cost. Use Excel or Sheets to show your work.
Laboratory Costs
Specimens Processed
January
$ 1,710,000
450,000
February
$ 2,090,000
580,000
March
$ 1,632,000
405,000
April
$ 2,105,000
600,000
May
$ 1,900,000
520,000
June
$ 2,145,000
610,000
Required:
1. Use the high-low method to estimate the fixed and variable components of admitting costs. Use Excel or Sheets to show your work.
2. Express the fixed and variable components of admitting costs as a cost formula in the form Y= a+ bX.
Laboratory Costs
Specimens Processed
January
$ 1,710,000
450,000
February
$ 2,090,000
580,000
March
$ 1,632,000
405,000
April
$ 2,105,000
600,000
May
$ 1,900,000
520,000
June
$ 2,145,000
610,000
Explanation / Answer
Dear Student Thank you for using Chegg Please find below the answer and please give thumbs up Statementshowing Computations Paticulars Amount Cost at highest level of activity 2,145,000.00 Cost at Lowest level of activity 1,632,000.00 Highest level of activity 610,000.00 Lowest Level of activity 405,000.00 Variable cost per unit = (2145,000 - 1632,000)/(610,000 - 405,000) Variable cost per unit = 513,000/205,000 Variable cost per unit = $2.5024 Fixed Costs = 1632000 - 405000*2.5024 Fixed Costs = $618,512.20 Y = 618,532.20 + 2.5024*x
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