Estimating the variable and fixed cost portion of a mixed cost The facilities housekeeping departmen

Estimating the variable and fixed cost portion of a mixed cost

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The facilities housekeeping department at St Luke’s Hospital has determined that the appropriate cost driver for housekeeping costs is patient-days There are 10,000 patient-days per month The department has collected the following accounts for the past month:

Monthly Housekeeping Expenses Amount

Supervisors’ Salaries Expense $10,000

Depreciation Expense—Scrubbing Machines $5,000

Cleaning Supplies Expense $7,000

Hourly Workers’ Wages Expense $100,000

Insurance Expense—Scrubbing Machines $2,000

Required:

Estimate the cost function using the account analysis method