Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The audiology department at Randall Clinic offers many services to the clinics patients. The three most common, along with cost and utilization data, are as

The audiology department at Randall Clinic offers many services to the clinics patients. The three most common, along with cost and utilization data, are as follows:

Service

Variable cost per service

Annual Direct Fixed Costs

Annual Number of Visits

Basic examination

$7

$60,000

4,000

Advanced examination

10

40,000

2,500

Therapy session

15

50,000

1,000

a. What is the fee schedule for these services, assuming that the goal is to cover only variable and direct fixed costs?

b. Assume that the audiology department is allocated $100,000 in total overhead by the clinic, and the department director has al- located $60,000 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.)

c. 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.)

please explain the answers, and don't just post it as a picture so I can edit on that calculation if needed.

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

The Successful Audit New Ways To Reduce Risk Exposure And Increase Efficiency

Authors: Felix Pomeranz

1st Edition

1556233914, 978-1556233913

More Books

Students also viewed these Accounting questions

Question

Does it avoid use of underlining?

Answered: 1 week ago