skip to Main Content
The smarter way
to do assignments.

Please note that this is just a preview of a school assignment posted on our website by one of our clients. If you need assistance with this question too, please click on the Order button at the bottom of the page to get started.

1. The administrator ofAzaleaHillsHospital would like a
cost formula linking the costs involved in admitting patients to
the number of patients admitted during a month. The admitting
department’s costs and the number of patients admitted during the
immediately preceding eight months are given in the following
table.

MONTH                                 
Number
of                              
Admitting Department

                                            
Patients
Admitted                         
           Costs

May                                     
1,800                                      
$14,700

June                                     
1,900                                      
$15,200

July                                      
1,700
                                      $13,700

August                                 
1,600                                      
$14,000

September                           
1,500                                      
$14,300

October                  
             1,300                                      
$13,100

November                           
1,100                                      
$12,800   

December                           
1,500                                      
$14,600
 
Required:
a) Use the high-low method to establish the fixed and
variable components of admitting costs.
b) Express the fixed and variable components of admitting
costs as a cost formula in the linear equation form Y = a +
bX.
2. Reveen Products sells camping
equipment. One of the company’s products, a camping lantern, sells
for $90 per unit. Variable expenses are $63 per lantern, and fixed
expenses associated with the lantern total $135,000 per
month.
 
Required:
a) Compute the company’s break-even
point in number of lanterns and in total sales
dollars.
 
b) If the variable expenses per lantern
increase as a percentage of the selling price,
will
it result in a higher or a lower break-even point? Why?
(Assume that the fixed expenses remain unchanged.)
 
c) At present, the company is selling
8,000 lanterns per month. The sales manager is convinced that a 10%
reduction in the selling price will result in a 25% increase in the
number of lanterns sold each month. Prepare two contribution income
statements, one under present operating conditions, and one as
operations would appear after the proposed changes. Show both total
and per unit data on your statements and determine if the proposed
changes will be beneficial to the company’s net operating
income.
 
d) Refer to the data in (3) above. How
many lanterns would have to be sold at the new selling price to
yield a minimum net operating income of $72,000 per
month?

GET HELP WITH THIS ASSIGNMENT TODAY

Clicking on this button will take you to our custom assignment page. Here you can fill out all the additional details for this particular paper (grading rubric, academic style, number of sources etc), after which your paper will get assigned to a course-specific writer. If you have any issues/concerns, please don’t hesitate to contact our live support team or email us right away.

How It Works        |        About Us       |       Contact Us

© 2018 | Intelli Essays Homework Service®

Back To Top