In: Advanced Math
5. The cost of heart procedures for a county-run hospital is $125,000, with a fixed cost of $50,000 and a variable cost of $75,000. The hospital completed 250 procedures last year. [A] Assuming no changes in the number of procedures the hospital will perform next year, calculate the cost of surgery for next year, if (a) a 2% increase in variable and 1.5% increase in fixed costs, and (b) it wants to maintain 3.5% safety margin. [B] What would be the cost if the number of procedures (1) will increase by 2%, and (2) will decrease by 4%, with and without safety margin, assuming no changes in cost conditions next year?