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  • Lesson 1 - Chapter 3 - Suggeted Solutions-1

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    Omisha Singh
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    The document provides information about the cost estimation of blood tests, including the variable and fixed costs per test, the cost functions relating total cost to the number of tests, and the costs of conducting 5,500 tests based on two different cost structures. It also notes that 96% of the variability in a laboratory's running costs can be explained by the number of blood tests conducted.

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    The document provides information about the cost estimation of blood tests, including the variable and fixed costs per test, the cost functions relating total cost to the number of tests, and the costs of conducting 5,500 tests based on two different cost structures. It also notes that 96% of the variability in a laboratory's running costs can be explained by the number of blood tests conducted.

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    © All Rights Reserved
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    5 views1 page

    Lesson 1 - Chapter 3 - Suggeted Solutions-1

    Uploaded by

    Omisha Singh
    The document provides information about the cost estimation of blood tests, including the variable and fixed costs per test, the cost functions relating total cost to the number of tests, and the costs of conducting 5,500 tests based on two different cost structures. It also notes that 96% of the variability in a laboratory's running costs can be explained by the number of blood tests conducted.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    Lesson: Cost Estimation – Suggested Solutions

    (You must type the solution exactly as shown)

    1. Variable cost = $9.38 per blood test

    2. Fixed cost = $32,402

    3. Cost Function: Y=$32,402 + $9.38x

    4. Cost @ 5,500 tests = $83,992

    5. Variable cost: $10.10 per blood test

    6. Fixed cost: $29,568

    7. Cost function: Y=$29,568 + $10.10x

    8. This suggests that 96 percent of the variability of the laboratory running costs can be
    explained by changes in the number of blood tests conducted.

    9. Cost @ 5,500 test: $85,118

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