To estimate the monthly maintenance cost for the maintenance department in a hospital, the following monthly costs are available:
Monthly Expense Costs
Supervisor Salary Expense $3,000
Depreciation Expense—Maintenance Equipment $5,000
Repairs Expense—Maintenance Equipment $5,000
Supplies Expense $7,000
Wages Expense—Maintenance Workers $10,000
The Supervisor Salary Expense and the Depreciation Expense are fixed costs. The remaining expenses are variable costs. There are 1,000 patient days in a month, which is the cost driver for maintenance costs. Estimate the cost function where Y is the monthly maintenance cost and X is the variable cost per patient day.
A) Y = $8 + $22X
B) Y = $8,000 + $22,000X
C) Y = $8,000 + $22X
D) Y = $30,000 + $22,000X
C
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