Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1. The Anacome County Health Department is considering using 400 square feet of excess office space to provide a clinic for Healthchek visits. These visits

1. The Anacome County Health Department is considering using 400 square feet of excess office space to provide a clinic for Healthchek visits. These visits are reimbursed $75 under a Medicaid program. Variable costs per visit are $55, and providing the service requires an additional physician assistant and nurse with prorated salaries of $75,000 and $60,000 respectively. The state has mandated efforts to increase the utilization of of Medicaid eligibility, so the Department of Social Services is conducting interventions to increase eligibility awareness in the community. As a result, the health department expects 13,000 Healthchek visits in the coming year. Nonavoidable overhead costs for the health department are $250,000 per year and will be allocated to each program based on its proportional share of the health department's total office space of 2,500 square feet.

What are the total contribution margin and total product margin for a Healthchek visit?

Considering the total product margin, should the health department add the clinic and provide the service? ADD or NOT ADD?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

How To Audit Anything The Pink Book Of Auditing Any Process

Authors: R. Alakbarov

1st Edition

1520195575, 978-1520195575

More Books

Students also viewed these Accounting questions