5. The cost of heart procedures for a county-run hospital is$125,000, with a fixed cost of $50,000 and a variable cost of$75,000. The hospital completed 250 procedures last year. [A]Assuming no changes in the number of procedures the hospital willperform next year, calculate the cost of surgery for next year, if(a) a 2% increase in variable and 1.5% increase in fixed costs, and(b) it wants to maintain 3.5% safety margin. [B] What would be thecost if the number of procedures (1) will increase by 2%, and (2)will decrease by 4%, with and without safety margin, assuming nochanges in cost conditions next year?
