A Healthcare Executive Is Using Regression to Predict Total Revenues

question 35

Multiple Choice

A healthcare executive is using regression to predict total revenues.She has decided to include both patient length of stay and insurance type in her model.Insurance type can be grouped into three categories: Government-Funded,Private-Pay,and Other.Her model is

• A)Y = b₀.
• B)Y = b₀ + b₁ X₁.
• C)Y = b₀ + b₁ X₁ + b₂ X₂.
• D)Y = b₀ + b₁ X₁ + b₂ X₂ + b₃ X₃.
• E)Y = b₀ + b₁ X₁ + b₂ X₂ + b₃ X₃ + b₄ X₄.

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Definitions:

Required Sales

The amount of sales needed to achieve a specific financial goal, such as breaking even or reaching a profit target.

Contribution Margin Ratio

The percentage of each sales dollar remaining after variable costs are subtracted, available to cover fixed costs and provide profit.

Unit Contribution Margin

The difference between the selling price of a single unit and its variable costs, indicating the contribution towards covering fixed costs and generating profit.

Cost-Volume-Profit Analysis

Cost-Volume-Profit Analysis is a management accounting tool that helps determine how changes in cost and volume affect a company's profit.