PLEASE ANSWER IN CLEAR DETAIL AND WITH REASONING. 7.7 Northeast Medical Group, a

Question

PLEASE ANSWER IN CLEAR DETAIL AND WITH REASONING.

7.7 Northeast Medical Group, a family practice, has the following financial data and operational metrics: Number of physicians Total revenue $2,748,360 Total operating costs $1,557,615 Total procedures per physician 12,353 Patients per physician 1,941 Visits per physician 5,333 a. What is the group?s revenue per physician? b. What is the group?s operating cost per physician? c. What is the group?s total operating profit? d. What is the group?s profit per physician? Per patient? Per visit? Per procedure? e. Assume that the group plans to reinvest $50,000 of its profits in the practice. (It plans to buy a new EKG [electrocardiogram] machine.) Also, assume that the re mainder of profits will be distributed equally to the group?s physicians as salary. What compensation will each physician receive?

Explanation / Answer

a) Total Revenue           2,748,360.00 No of Physicians                           5.00 Revenue per Physician              549,672.00 b) Total Operating Costs           1,557,615.00 No of Physicians                           5.00 Operating Cost per Physician              311,523.00 c) Total Revenue           2,748,360.00 Total Operating Costs           1,557,615.00 Operating Profit           1,190,745.00 d) Operating Profit           1,190,745.00 No of Physicians                           5.00 Operating Profit per physician              238,149.00 No of Physicians                           5.00 No of patients per Phyisician                   1,941.00 Total Patients                   9,705.00 Operating Profit           1,190,745.00 Operating Profit per Patient                       122.69 No of Physicians                           5.00 No of visits per Phyisician                   5,333.00 Total visits                 26,665.00 Operating Profit           1,190,745.00 Operating Profit per Visit                         44.66 No of Physicians                           5.00 No of procedure per Phyisician                 12,353.00 Total procedure                 61,765.00 Operating Profit           1,190,745.00 Operating Profit per procedure                         19.28 e) Operating Profit           1,190,745.00 Profit reinvested                 50,000.00 Balance to be reinvested as salary           1,140,745.00 No of physician                           5.00 Compensation each Physician will receive              228,149.00

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