The Fixed Cost of Operating the Maintenance Facility of Cuyahoga

question 24

Essay

The fixed cost of operating the maintenance facility of Cuyahoga County Hospital is $3,900,000 annually. It incurs variable costs at the rate of $40 per labor- hour of maintenance. The facility averages 60,000 maintenance hours a year. Budgeted and actual hours per user were as follows: $\begin{array}{lll}& \text { Budgeted hours } & \text { Actual hours } \\\text { Operating } & 16,000 & 15,100 \\\text { Patient care } & 42,000 & 45,000 \\\text { Administration } & 2,000 & 1,800 \\\text { Total } & 60,000 & 61,900\end{array}$ Required:
a. How much would the Patient Care Department receive in maintenance costs if a single rate is used based on budgeted hours?
b. How much would the Operating Department receive in maintenance costs if a dual rate is used with fixed costs allocated on budgeted hours and variable costs allocated on actual hours?

Identify the factors affecting collusion and the sustainability of cartel agreements.

Understand the economic implications of advertising in oligopolistic markets.

Comprehend the concepts of first-mover advantage and Nash equilibrium in game theory.

Grasp the significance of the kinked-demand curve model in noncollusive oligopolies.

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