I was able to figure out the answers to 1 and 3 but I am struggling to complete question 2 because the directions say to consider the maximum number of patients to be seen daily which is 20. I add up all the time and I am exceeding 7 hrs which is the work day. I am trying to figure out how much time Ortiz should spend on each service in a day. I added my spreadsheet so far and the directions are pasted. I think I am missing something to consider but I am not sure what it is. I think I know the answer to #4 as well based on what I am seeing.

Ortiz works seven hours a day.

Required 1. Determine the best sales mix. Rank the services offered in order of their profitability.

2. Based on the ranking in I, how much time should Ortiz spend on each service in a day? (Hint: Remember to consider the maximum number of patient billings per day.) What would be the daily total contribution margin generated by Ortiz?

3. Dr. Massy believes the ranking is incorrect. He knows that the daily 60-minute meeting of the weightloss support group has 50 patients and should continue to be offered. If the new ranking for the services is (1) weight-loss support group, (2) phone calls, and (3) office visits, how much time should Ortiz spend on each service in a day? What would be the total contribution margin generated by Ortiz, assuming the weight-loss support group has the maximum number of patient billings?

4. Manager Insight: Which ranking would you recommend? What additional amount of total contribution margin would be generated if your recommendation is accepted

Dr. Massey Sales Mix Decision Incremental Analysis 1. Best sales mix determined Billing rate Less variable costs per task Contribution margin per billing/unit (A) Hours to complete (B) Contribution margin per billing (AB) contrib margin/hours Profit Ranking order: 2: Ortiz Contribution Margin Per day based on above 4 hrs to complete 40 calls 5 hours to see 20 patients 1 group meeting $ $ $ Office Visits 50.00 $ 25.00 25.00 $ 0.25 100.00 $ $100.00 1. phone calls profit 4 Calls 5 Office 1 Group Times Times Times Phone Calls 25.00 12.00 13.00 0.10 130.00 $130.00 2. office visits/profit Time Alloted 0.1 hour per call 0.25 hour per visit 1 at 50 people 3: Sales mix and contribution margin Based on Dr. Masey's Ranking change would allow only 8 visits in 7 hrs due to other tas Max time per day Phone calls Time allotted 40 Calls times 0.1 hour per call Office visits as lowest ranking 8 Visit times 0.25 hour per visit Weight-Loss Support Group 1 Group times 1 hour per visit Ortiz should spend 4 hours on 40 phone calls, 1 hour on support group, and 2 hours on 8 office vists. Total Daily Contribuition Margin using Dr. Massey's rating Time 4.00 Phone calls $ 130.00 Times 2.00 Office visits $ 100.00 Times Times 1.00 Weight-Loss Support Group $ 5.00 Using Dr. Massey's ranking would equal daily contribution margin of 4. Revised sales ranking and contribution margin. Data Weight-Loss Support Group $ 10.00 5.00 $ 5.00 1.00 $ 5.00 Maximum number of patient billings per day Hours per billing Billing rate Variable costs 3. Weight-Loss Support$5.00 Group/Profit CM $130 $100 $5 520 500 250 sits in 7 hrs due to other tasks 7.00 hours 4.00 hours 2.00 hours 1.00 hours sts. Equals Equals Equals $ $ $ 520.00 200.00 5.00 $ 970.00 x 50 = $ 250.00 Office Visits 20 0.25 $ $ Phone Calls 40 0.10 50 $ 25 $ 25 12 Phone Calls 40 0.10 $ $ Weight-Loss Support Group 50 1.00 25 $ 10 12 $ 5