Estimating Costs

Assume that a radiology group practice has the following cost structure:

Fixed Cost: $600,000 Variable Cost Per Procedure: $25

Furthermore, assume that the group expects to perform 6,500 procedures in the coming year.

A. What is the groups underlying cost structure? B. What are the groups expected total cost? C. What are the groups estimated total costs at 5,000 procedures? At 10,000 procedures? D. What is the average cost per procedure at 5,000, 7,500 and 10,000 procedures?