Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

7 . 2 The audiology department at Randall Clinic offers many services to the clinic's patients. The three most common, along with cost and utilization

7.2 The audiology department at Randall Clinic offers many services to the clinic's patients. The three most common, along with cost and utilization data, are as follows:
\table[[Service,\table[[Variable Cost],[per Service]],\table[[Annual Direct],[Fixed Costs]],\table[[Annual Number],[of Visits]]],[Basic examination,$5,$50,000,3,000],[Advanced examination,7,30,000,1,500],[Therapy session,10,40,000,500]]
What is the fee schedule for these services, assuming that the goal is to cover only variable and direct fixed costs?
Assume that the audiology department is allocated $100,000 in total overhead by the clinic, and the department director has allocated $50,000 of this amount to the three services listed above. What is the fee schedule assuming that these overhead costs must be covered? (To answer this question, assume that the allocation of overhead costs to each service is made on the basis of number of visits.)
Assume that these services must make a combined profit of $25,000. Now what is the fee schedule? (To answer this question, assume that the profit requirement is allocated in the same way as overhead costs.)
image text in transcribed

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

Financial Accounting Study Guide Tools For Business Decision Making

Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm

4th Canadian Edition

0470155736, 978-0470155738

More Books

Students also viewed these Accounting questions