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Health Care Costs
Question 1
Variable costs are expenses that vary in the level of action and are in total dollar amount. An example of variable costs in the health care sector is the cost of drugs, which may change due to inflation or other changes in the market, such as high demand or low supply (Finkler and Marc 42).
Fixed costs are health care expenses that are not altered by the changing market or demand and supply forces. An example of fixed costs is the basic charges that patients have to pay, such as registration and insurance.
Semi-variable costs have the features of both fixed and variable charges (Patterson and Fabozzi 37). An example is the sum of money that patients have to pay to use certain medical equipment or access certain medical care services. These fees may fluctuate within the time they are required or extent power and additional support needed to access the equipment.
Question 2
First-in, First-Out (FIFO) is a method of inventory valuation where the cost of materials sold is based on the materials that were bought at the earliest time of the period, but the cost of inventory is centered on the materials that were bought at the close of the period. In this method, the inventory is valued close to the most current costs of replacement (Walton and Aerts 21).
Last-in, First-Out (LIFO) is a method of inventory valuation where the cost of goods is based on the cost of materials that were bought at the end of a period, but the