Estimating the variable and fixed cost portion of a mixed cost.

The facilities housekeeping department at St. Luke’s Hospital has determined that the appropriate cost driver for housekeeping costs is patient-days. There are 10,000 patient-days per month. The department has collected the following accounts for the past month:

Monthly Housekeeping Expenses Amount

Supervisors’ Salaries Expense $10,000

Depreciation Expense—Scrubbing Machines $5,000

Cleaning Supplies Expense $7,000

Hourly Workers’ Wages Expense $100,000

Insurance Expense—Scrubbing Machines $2,000


Estimate the cost function using the account analysis method.