Case Study: You have been recently promoted to Departmental Manager after you boss, Cole Kutz, retired. The CFO would like you to provide him with the cost of a new test that the organization would like to market in your area, a titanium scan. He places a pile of data on your desk, smiles, and sets up a meeting tomorrow to go over the results. Below is what you find in the pile:

Average salary for your staff

$$28/$hour

Benefits for staff

$35\%$ of salary

Number of new tests anticipated$/$month

$300$

Rent for your department$$s space

$$500/$mo

Technical supply cost for new test

$$10/$test

Utilities for department$/$year

$$500$

Report supplies

$$0\mathrm{.}10$ each

Department supervisor salary

$$55,000/$year

FICA taxes paid$/$ employee

$12\mathrm{.}7\%$

# controls needed$/$day

$12$

# calibrators needed$/$day

$4$

Test repeats anticipated

$3/$week

Pathologist$/$Radiologist salary

$$200,000/$yr$.$

Cost of calibrators

$$6\mathrm{.}00/$day

Total test performed by the lab

$500,000/$yr$.$

Sample collection supplies

$$0\mathrm{.}15$ each

Cost of controls

$$4\mathrm{.}50/$day

# minutes to run new test

$15$

Information system support

$$10,000/$year

You sort through the information and separate the data into fixed and variable costs.

You then begin your calculations to determine what the overall cost of producing one titanium scan patient result. Financial Management: Cost Analysis of Titanium Scan

Name: $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

$1.$

Fixed Costs: $(5)$

Variable Costs: $(5)$

$2.$ Calculations for Fixed costs$/$reportable scan: $(5)$

$3.$ Calculations for Variable costs$/$reportable scan: $(5)$

$4.$ Calculations for Labor costs$/$reportable scan: $(5)$

$5.$ Total cost$/$reportable titanium scan result: $ $(5)$

$6.$ Is there any information that the CFO has failed to provide that would impact your cost estimate? $(2)$

$7.$ In which sector does most of the cost of produce the test result occur? Fixed$/$variable$/$salary $(1)$