Question

EXERCISE 3-2 Scattergram Analysis [LO2 Q1 The data below have been taken from the cost records of the Halifax General Hospital. The data relate to the costs of admitting patients at various levels of patient activity: Number of Patients Admitted Admitting Department Costs Month May 3,600 $29,400 $30,400 June 3,800 July 2,900 $27,400 August 3,200 $28,000 September 3,300 $28,600 October $26,200 2,600 2,200 November December $25,600 $29,200 3,500 Required: 1. Use Microsoft Excel to prepare a scattergram using the above data. Plot admitting department costs on the vertical axis and the number of patients admitted on the horizontal axis. 2. Does it appear that admitting department costs are related to the number of patients admitted? Explain.

Answer 1

1) To plot the scattergram, use excel and enter the values of number of patients and admitting department costs as shown below.

Choose insert in excel and select scatter. The required scattergram is obtained.

File Home Insert Page Layout Formulas Data Review View Power Pivot Tell me what you want to do... i Store a LA telt L VS A A A E 2 My Add-ins - Recommended PivotChart Slicer Timeline Hyperlink Pictures Online Pictures Illustrations i 3D Map Tours Line Column Win/ Loss Sparklines Text Box Header & Footer Text Add-ins Charts G Filters Links PivotTable Recommended Table PivotTables Tables A1 _A B C Tables : fic D E Illustrations F G H I J ha Scatter K L M Sparklines N O Filters P Q R S Add- ins C Chart 3 X v fic Н IL M N 5 1 Bubble nt costs $31,000 More Scatter Charts... Number of Admitting patients department admitted costs 3600 $29,400 3800 $30,400 2900 $27,400 3200 $28,000 3300 $28,600 2600 $26,200 2200 $25,600 3500! $29,200 $30,000 $29,000 $28,000 $27,000 $26,000 21 13 22 14 23 15 $25,000

SCATTERGRAM 531,000 000 0 $29,000 o $28,0000 ADMITTING DEPARTMENT COSTS $25,000 0 500 1000 1500 2000 2500 3000 3500 4000 NUMBER OF PATIENTS ADMITTED

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2)

From the above scattergram we can observe that the admitting department cost is related to the number of patients admitted.

As the number of patients admitted increase, the admitting department costs also increases as observed in the graph. We can conclude that admitting department costs is dependent on the number of patients admitted. Thus admitting department cost is the dependent variable and the number of patients admitted is the independent variable.

The below table displays the relationship between admitting department costs and the number of patients admitted. The data in the table shows that admitting department costs increases as the number of patients admitted also increases.

Number of patients admitted	Admitting department costs
2200	$25,600
2600	$26,200
2900	$27,400
3200	$28,000
3300	$28,600
3500	$29,200
3600	$29,400
3800	$30,400