Maintenance Cost at a Hospital Was Observed to Increase as Activity

question 152

Multiple Choice

Maintenance cost at a hospital was observed to increase as activity level increased. The following data was gathered: Activity Level - Maintenance Cost Month Patient Days Incurred January 5,600 $7,900 February 7,100 $8,500 March 5,000 $7,400 April 6,500 $8,200 May 7,300 $9,100 June 8,000 $9,800 If the cost of maintenance is expressed in an equation, what is the independent variable for this data?

• A) Fixed cost.
• B) Variable cost.
• C) Total maintenance cost.
• D) Patient days.

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Definitions:

Goodwill

An intangible asset that arises when a business is acquired for more than the fair value of its net identifiable assets.

Taxable Income

The amount of income used to calculate how much tax an individual or a company owes to the government.

Consolidated Income

The total net income of a parent company and its subsidiaries, after accounting for the ownership interest of noncontrolling shareholders.