Question

eBook Calculator Print Item Cost Behavior, High-Low Method, Pricing Dedisiorn Teresa's Medical Center (STMC) offers a number of specialized medical services, including neurosdience, cardiology, and ancology. STMC's strong reputation for quality medical care allowed it to branch out into other services. It is now ready to expand its orthopedic standing orthopedic dinic offering full range of outpatient, surgical, and physical therapy services. The cost of the orthopedic straight-line basis. All equipment within the facility is leased. services and has just added a free- acility isslepredated on a Since the dinic had no experience with in-patient orthopedic services (for patients recovering from hip and knee replacements, for example), it decided to operate the orthopedic dlinic adopted a patient-day charge of $190, an amount equal to the fees charged by a hospital specializing in orthopedic care in a nearby city. center for two months before determining how much to charge per patient day on an ongoing basis. As a temporary measure, the This initial per-day charge was quoted to patients entering the orthopedic center during the first two months with assurances that if the actual operating costs of the new center justified it, the charge could be less. In no case would the charges be more. A temporary policy of billing after 60 days was adopted so that any adjustments could be made. The orthopedic center opened on January 1. During January, the center had 4,300 patient days of activity. During February, the activity was 4,700 patient days. Costs for these two levels of activity output are as follows: 4,300 Patient Days 4,700 Patient Days s 55,300 55,300 Salaries, nurses Aides Pharmacy 34,900 34,900 229,900 249,500 Check My Work 3 more Check My Work uses remaining Previous 817 PM R AENG 24/01/2019 up

Answer 1

The answer has been presented in the supporting sheet. The cost has been for each cost type and total cost has been calculated at both 4500 and 5100 patient level. For detailed solution refer to the supporting details.