Reference no: EM13588604

The audiology department at Randall clinic offer many services in the clinic's patients. The three most common, along with cost and utilization data, are as follow:

service                          variable cost      annual direct      Annual number

_______                        per service         fixed costs          of visits

Basic examination             $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 gold 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 allocated $50,000 of this amount to the three services listed above. What is the fee schedule assuming that these overhead costs must be covered? (To answer this question, assume that the allocation of overhead cost to each service is made on the basis of the number of visit.)

c. Assume that these services must make a combined profit of $25,000. Now, what is the fee schedule? (To answer this question, assume that the profit requirement is allocated in the same way as the overhead costs.)