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Question - You are in charge of the Emergency Room department at the local hospital. You know the ER has variable costs, fixed costs and mixed costs. Variable costs are $300 per patient, fixed costs for the month are $600,000 and mixed costs bounce around depending on the number of patients seen. Mixed costs for the past six months look like this along with the number of patients seen:
Number of patients
Mixed Costs
April
3,150
$630,000
May
3,675
$712,950
June
4,028
$725,040
July
3,996
$726,070
August
3,875
$716,875
September
3,543
$694,428
Using the Hi-Lo method, calculate the monthly fixed cost and the variable cost per patient seen for the Mixed Costs (for the variable portion round your per patient answer to the nearest 1/10 of a penny).
If you anticipate having 3,432 patients in the ER next month, how much do you forecast Mixed Costs to be?
If the average number of patients each month is 3,711, what is the average total cost per patient seen?
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