The director of surgery at a local hospital is interested in understanding his unit's costs....
70.2K
Verified Solution
Link Copied!
Question
Accounting
The director of surgery at a local hospital is interested in understanding his unit's costs. An assistant collected data for the past 36 months on unit cost (labor, supplies, and so on) along with the number of procedures performed in the unit. The assistant analyzed the data using a spreadsheet program, and the following output was generated.
Equation
Intercept $1,009,000
Coefficient on procedures $245
Statistical data
Correlation coefficient 0.533
R2 0.283
The unit is planning to perform an average 20,000 procedures per month for the coming year.
Required:
a.Use the regression output to write the surgical unit cost equation.
surgical unit cost= xxx + xxx * procedures
b.Based on the cost equation, compute the estimated costs for the surgical unit per month for the coming year.
c.The director of surgery has asked you for advice on whether he should rely on the estimate.
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
