General hospitals, a not-for-profit acute facility, has estimate the following cost first its inpatient services:

Fixed costs: $10,000,000, Variable cost per inpatient day: $150

The hospital expects to have 15,000 inpatient days next year.

a. What is the hospital’s underlying cost structure?

b. What are the hospital’s expected total costs?

c. What are the hospital’s estimated total costs at 12,500 inpatient day? At 17,500 patient day?

d. What are the average cost per patient day at 12,500, 15,000 and 17,500 patient day?