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Budget Project You have been asked to establish a pricing structure for radiology on a per Present budgetary data is presented below: procedure basis. Budgeted
Budget Project You have been asked to establish a pricing structure for radiology on a per Present budgetary data is presented below: procedure basis. Budgeted Procedures Budgeted Cost Desired Profit $10,000 $400,000 $80,000 It is estimated that Medicare patients comprise 40 percent of total radiology volume and will pay on average $38.00 per procedure. Approximately 10 percent of the patients are cost payers. The remaining charge payers are summarized below: Blue Cross Unity PPO Kaiser Self-Pay 20 15 10 10 10 40 50% 1. What rate must be set to generate the required $80,000 in profit in the preceding example? 2. If the forecasted volume increased to 12,000 procedures and budgeted costs increased to $440,000, while all other variables remained constant, what price should be established? 3. Assume that the only change in the original example data is that Blue Cross raises their discount to 20 percent. What price should be set
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