Question

The number of X-rays and X-ray costs over the last nine months in
Beverly Hospital are given below:

Month              X-Ray Costs             X-Rays Taken
January             $28,000                   6,250
February             29,000                   7,000
March                23,000                   5,000
April                18,000                   3,750
May                  21,000                   4,500
June                 24,000                   5,500
July                 20,000                   4,250
August               16,000                   3,000
September            25,000                   5,750

Beverly Hospital expects to take 4,900 X-rays during October.

Using the high-low method, calculate Beverly Hospital's
expected X-ray cost for October.

Answer 1

X-Ray Cost Per unit = Change in cost / Change in X-ray Taken
	Cost	X - Ray Taken
High Cost in February = (A)	$                    29,000	7,000
Low Cost in August =(B)	$                    16,000	3,000
Differences (A-B)	$                    13,000	4,000
X-Ray Cost Per unit = Change in cost / Change in X-ray Taken
X-Ray Cost Per unit = $ 13,000 / 4000 X-Ray
X-Ray Cost Per unit = $ 3.25 Per Unit
Total Cost of October = X - Ray Taken   * X -ray cost per unit
Total Cost of October = 4900 * $ 3.25
Total Cost of October = $ 15,925
Answer = $ 15,925