The Estimate of The Marginal Cost of The Phase 4 Hospital Services.docx

Jomo Kenyatta University of Agriculture and Technology*
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Feb 11, 2024
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The Estimate of The Marginal Cost of The Phase 4 Hospital Services By definition, marginal cost refers to the change in total production cost as a result of producing one additional unit. On the same note, fixed cost denotes the expenses paid by a company, and they are independent of all business activities. Bearing this in mind, the marginal cost of Phase 4 hospital services can be found by getting the difference between average total cost and fixed costs. Mathematically, this is represented as 119,805-48,337= 71,468. This figure depends on the fact that 60% of the costs are fixed, which leaves the remaining 40% as variable costs. Assuming The Agreed-Upon Price Is $90,000, What Is the Expected Profit on The Contract Assuming That It Brings In 20 New Patients By assuming the agreed-upon price is $90,000, the profit when 20 new patients are brought in will be the difference between the billing amount, variable cost, and fixed cost. In that case, the mathematical representation of expected profit is (D=A-B-C), which is (90,000-71,468) X20= $370,640.
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