Reference no: EM131699814

Estimating the variable and fixed cost portion of a mixed cost.

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.