The audiology department at Randall Clinic offers many services to the clinic\'s

Question

The audiology department at Randall Clinic offers many services to the clinic's patients. The three most common, along with cost and utilization data, are as follows: Service Variable Cost Annual Direct Annual # Visits per Service Fixed Costs Basic exam $5 $50,000 3,000 Advanced examination $7 $30,000 1,500 Therapy session $10 $40,000 500 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

Explanation / Answer

Solution : As only 2 parts are present in question so I solved both of them. Part A: Fee schedule: Basic examination : 5 * 3000 + 50000 = 65000 ,per person cost = 65000 / 3000 = 21.66$ Advanced examination: 7 * 1500 + 30000 = 40500 Per person cost = 27$ Therapy session: 10*500 + 40000 = 45000 per person cost:90$ Part B: the department director has allocated $100000 of this amount to the three services listed it will be divided according to the number of visits. total number of visits=3000 +1500 +500=5000 Per visit allocation = 100000 / 5000 = 20$ New fee schedule = Basic Examination = 21.66 - 20$ = 1.66$ Advanced examination = 27 - 20 = 7$ Therapy session = 90 - 20 = 70$

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.