Draw a scatter diagram of the clinic’s administrative costs during its first year of operations, visually fit a curvilinear cost line to the plotted data, mark the clinic’s relevant range of activity on the scatter diagram, and visually fit a semi-variable cost line to approximate the curvilinear cost behavior pattern within the clinic relevant range.

Question

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Answer 1

Question

Chapter 6, Problem 51C

1.,2.,3.&4.

To determine

Draw a scatter diagram of the clinic’s administrative costs during its first year of operations, visually fit a curvilinear cost line to the plotted data, mark the clinic’s relevant range of activity on the scatter diagram, and visually fit a semi-variable cost line to approximate the curvilinear cost behavior pattern within the clinic relevant range.

5.

To determine

Estimate the fixed cost and variable cost components of the visually fit semi-variable cost line.

6.

To determine

Identify an equation to express the semi-variable cost approximation of the clinic’s administrative costs.

7.

To determine

Predict the clinic’s administrative cost during a month when 800 patients and 300 patient visit the clinic, and state the visually fit cost lines use to make each of these predictions.

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David Jones, the new administrator for a surgical clinic, was trying to determine how to allocate his indirect expenses. His staff was complaining that the current method of taking a percentage of revenues was unfair. He decided to try to allocate utilities based on square footage of each department, administration based on direct costs, and laboratory based on tests. Use the information in the chart below to answer problems 22, 23 and 24. Square Footage DirectExpenses Lab Tests Utilities $200,000 Administration 2,000 500,000 Laboratory 2,000 625,000 Day-op Suite 3,000 1,400,000 4,000 Cystoscopy 1,500 300,000 500 Endoscopy 1,500 600,000 500 Total 10,000 $3,375,000 5,000 1. What are the Day Op Suite’s total expenses? 2. What are the Cystoscopy Department’s total expenses? 3. What are the Endoscopy Department’s total expenses?

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Answer 2

Question

Chapter 6, Problem 51C

1.,2.,3.&4.

To determine

Draw a scatter diagram of the clinic’s administrative costs during its first year of operations, visually fit a curvilinear cost line to the plotted data, mark the clinic’s relevant range of activity on the scatter diagram, and visually fit a semi-variable cost line to approximate the curvilinear cost behavior pattern within the clinic relevant range.

5.

To determine

Estimate the fixed cost and variable cost components of the visually fit semi-variable cost line.

6.

To determine

Identify an equation to express the semi-variable cost approximation of the clinic’s administrative costs.

7.

To determine

Predict the clinic’s administrative cost during a month when 800 patients and 300 patient visit the clinic, and state the visually fit cost lines use to make each of these predictions.

Expert Solution & Answer

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Answer 3

Question

Chapter 6, Problem 51C

1.,2.,3.&4.

To determine

Draw a scatter diagram of the clinic’s administrative costs during its first year of operations, visually fit a curvilinear cost line to the plotted data, mark the clinic’s relevant range of activity on the scatter diagram, and visually fit a semi-variable cost line to approximate the curvilinear cost behavior pattern within the clinic relevant range.

5.

To determine

Estimate the fixed cost and variable cost components of the visually fit semi-variable cost line.

6.

To determine

Identify an equation to express the semi-variable cost approximation of the clinic’s administrative costs.

7.

To determine

Predict the clinic’s administrative cost during a month when 800 patients and 300 patient visit the clinic, and state the visually fit cost lines use to make each of these predictions.

Expert Solution & Answer

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Answer 4

Question

Chapter 6, Problem 51C

1.,2.,3.&4.

To determine

Draw a scatter diagram of the clinic’s administrative costs during its first year of operations, visually fit a curvilinear cost line to the plotted data, mark the clinic’s relevant range of activity on the scatter diagram, and visually fit a semi-variable cost line to approximate the curvilinear cost behavior pattern within the clinic relevant range.

5.

To determine

Estimate the fixed cost and variable cost components of the visually fit semi-variable cost line.

6.

To determine

Identify an equation to express the semi-variable cost approximation of the clinic’s administrative costs.

7.

To determine

Predict the clinic’s administrative cost during a month when 800 patients and 300 patient visit the clinic, and state the visually fit cost lines use to make each of these predictions.

Expert Solution & Answer

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Answer 5

Chapter 6, Problem 51C

1.,2.,3.&4.

To determine

Draw a scatter diagram of the clinic’s administrative costs during its first year of operations, visually fit a curvilinear cost line to the plotted data, mark the clinic’s relevant range of activity on the scatter diagram, and visually fit a semi-variable cost line to approximate the curvilinear cost behavior pattern within the clinic relevant range.

5.

To determine

Estimate the fixed cost and variable cost components of the visually fit semi-variable cost line.

6.

To determine

Identify an equation to express the semi-variable cost approximation of the clinic’s administrative costs.

7.

To determine

Predict the clinic’s administrative cost during a month when 800 patients and 300 patient visit the clinic, and state the visually fit cost lines use to make each of these predictions.

Answer 6

Chapter 6, Problem 51C

1.,2.,3.&4.

To determine

Draw a scatter diagram of the clinic’s administrative costs during its first year of operations, visually fit a curvilinear cost line to the plotted data, mark the clinic’s relevant range of activity on the scatter diagram, and visually fit a semi-variable cost line to approximate the curvilinear cost behavior pattern within the clinic relevant range.

Answer 7

Chapter 6, Problem 51C

1.,2.,3.&4.

To determine

Draw a scatter diagram of the clinic’s administrative costs during its first year of operations, visually fit a curvilinear cost line to the plotted data, mark the clinic’s relevant range of activity on the scatter diagram, and visually fit a semi-variable cost line to approximate the curvilinear cost behavior pattern within the clinic relevant range.

Answer 8

5.

To determine

Estimate the fixed cost and variable cost components of the visually fit semi-variable cost line.

Answer 9

5.

To determine

Estimate the fixed cost and variable cost components of the visually fit semi-variable cost line.

Answer 10

6.

To determine

Identify an equation to express the semi-variable cost approximation of the clinic’s administrative costs.

Answer 11

6.

To determine

Identify an equation to express the semi-variable cost approximation of the clinic’s administrative costs.

Answer 12

7.

To determine

Predict the clinic’s administrative cost during a month when 800 patients and 300 patient visit the clinic, and state the visually fit cost lines use to make each of these predictions.

Answer 13

7.

To determine

Predict the clinic’s administrative cost during a month when 800 patients and 300 patient visit the clinic, and state the visually fit cost lines use to make each of these predictions.

Answer 14

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Answer 15

Expert Solution & Answer

Answer 16

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Answer 17

Ch. 6 - Describe the importance of cost behavior patterns...Ch. 6 - Define the following terms, and explain the...Ch. 6 - Suggest an appropriate activity base (or cost...Ch. 6 - Draw a simple graph of each of the following types...Ch. 6 - Explain the impact of an increase in the level of...Ch. 6 - Explain why a manufacturers cost of supervising...Ch. 6 - Explain the impact of an increase in the level of...Ch. 6 - Prob. 8RQ Ch. 6 - Indicate which of the following descriptions is...Ch. 6 - Prob. 10RQ

Solution Summary: The author explains the visual-fit method used to estimate the fixed cost and variable cost components of the semi-variable cost line.

Concept explainers

Estimate the fixed cost and variable cost components of the visually fit semi-variable cost line.

Identify an equation to express the semi-variable cost approximation of the clinic’s administrative costs.

Predict the clinic’s administrative cost during a month when 800 patients and 300 patient visit the clinic, and state the visually fit cost lines use to make each of these predictions.

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Chapter 6 Solutions