A department of a clinic offers many services patients. 3 common procedures are:

Question

A department of a clinic offers many services patients. 3 common procedures are: Basic exam: variable cost $5, annual fixed direct fixed costs are $50,000, annual number of visits are 3000. Advanced exam: $7, Annual direct fixed costs of $30,000, annual number of visits is 1500. Total exam: 10 per visit, annual direct costs of $40,000, annual number of visits 500. Questions are: A. What are the fee schedule for these services assuming that the goal is to cover only variable and direct fixed costs? B. Now assume the department is allocated $100,000 in total overhead and has allocated $50,000 of this amount to the three exams above. What is the fee schedule assuming that these overhead costs must be covered? (assume the allocation of overhead costs to each service is made on the basis of number of visits). C.Now assume that these services must make a combined profit of $25,000, now what is the fee schedule? (assume that the profit required is allocated the same way as overhead costs)

Explanation / Answer

Exam Basic Advance Total No. of Visitor 3000 1500 500 Varr. Cost $15,000.00 $10,500.00 $5,000.00 Fixed Cost $50,000.00 $30,000.00 $40,000.00 Total Cost $65,000.00 $40,500.00 $45,000.00 A)Fees Schdule per Visit $21.67 $27.00 $90.00 Total Cost $65,000.00 $40,500.00 $45,000.00 Overhead $30,000.00 $15,000.00 $5,000.00 Total Cost $95,000.00 $55,500.00 $50,000.00 B) Fees Schdule $31.67 $37.00 $100.00 Total Cost $200,500.00 Profit $25,000.00 Total Sales $225,500.00 C) Fees Schedule $45.10

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