You have been asked to establish a pricing structure for radiology on a per-procedure basis. Present budgetary data is presented below:

Budgeted Procedures20,000

Budgeted Cost$800,000

Desired Profit$160,000

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:

PayerVolume %Discount %

Blue Cross204

Unity PPO1510

Kaiser1010

Self Pay540

50%

Question # 13 (10 points)

What rate must be set to generate the required $160,000 in profit in the preceding example?

Question # 14 (10 points)

If the forecasted volume increased to 24,000 procedures and budgeted costs increased to $880,000, while all other variables remained constant, what price should be established?

Question # 15 (10 points)

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?