High Low Method
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The number of X-rays taken and X-ray costs over the last nine months in Beverly Hospital are given below:
Month: X-ray taken X-ray costs
January 6,250 $28,000
Februray 7,000 $29,000
March 5,000 $23,000
April 4,250 $20,000
May 4,500 $22,000
June 3,000 $17,000
July 3,750 $18,000
August 5,500 $24,000
September 5,750 $26,000
1. using the high-low method, estimate the cost formula for X-ray costs.
2. using the cost formula you derived above, what X-ray costs would you expect to be incurred during a month in which 4,600 X-ray are taken?
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Solution Summary
The solution explains the use of high low method to derive the total cost formula.
Solution Preview
We first find the cost function. We take the highest and the lowest cost.
7,000 xrays cost 29,000
3,000 x rays cots 17,000
Then take the ...
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