Question

Total Cost = $128,000,000 + ($12,000 x Number of Patient Days)

In the cost formula, the term $128,000,000
a. is the total variable cost.
b. is the dependent variable.
c. is the variable rate.
d. is the total fixed cost.
e. cannot be determined from the above formula.

Answer 1

d. is the total fixed cost.

Step-by-step explanation:

Total cost is obtained by adding fixed costs to variable costs. Fixed costs are expenses that do not change in a period. They remain constant in the short-run regardless of the level of output. Variable costs are dependent on the level of output.

As per the equation presented, $120,000,000 represents the fixed costs. The figure is constant in the equation.