A physician’s office provides three types of exams: Brief, Intermediate, and Ext

Question

A physician’s office provides three types of exams: Brief, Intermediate, and Extended. Total annual costs for the office are $400,000. Hourly labor rates for the physician, nursing staff, and administrative staff are $100, $25, and $15, respectively. Additional data are as follows:

The physician practice allocates indirect costs based on relative weights as determined by the relative amount of time spent by a physician on each type of exam. Using a weight of 1.0 for an Intermediate exam, what is the weight for a Brief exam?


(Physician, Nursing, and Admin columns all list the amount of minutes it takes for each to perform the specified category of exam)

The answer to this problem is 0.37. I am unsure how to solve this problem, or how to get that answer. Any help is appreciated! Thank you!

Avg. Supply Cost Physician Nursing Admin + Billing Patient Visits/Year Brief $1 10 15 30 3600 Intermediate $2 27 15 30 1800 Extended $5 40 15 30 600

Explanation / Answer

physician take for intermediate exam = 27 minutes

physician takes for brief exam = 10 minutes

if weight of intermediate exam is =1

weight of breif exam is = 10/27*1=0.370

= 0.37

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