Essentials Of Cost Accounting For Health Care Organizations 3rd Edition by Steven Finkler, David Ward,Judith Baker

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Utryit Hospital has been using linear regression to estimate costs. It has been using patient days to predict electricity cost, but a recent study indicated that different types of patients consume substantially different amounts of electricity. The hospital has therefore decided to multiply its DRG casemix index by the number of admissions to get a case mix-weighted volume measure. The following information is available to you:
Using a hand-held calculator that has linear regression capability, or a computer, use simple linear regression to estimate the electricity cost next year. Also compute fixed cost, variable cost per unit, and the R-squared for your forecast for year 9 electricity cost. Does your solution agree with that in the chapter, which used patient days? Do you think your estimate is adequate?