Reference no: EM132752474

You have been hired as the manager for a new clinical lab company in the Atlanta metropolitan area. The lab is a nonprofit that serves low-income patients in the downtown area. The lab is in the process of setting its fees-for-services on individual services. The clinic director has estimated fixed costs of $436,000, a volume of 18,500 tests, and variable cost rate of $19.

She has asked you to prepare a PowerPoint presentation for the lab's board of directors, explaining variable and fixed costs for healthcare services in the lab.

1. Figure the price breakeven for the clinic.

2. List and explain fixed costs that the lab will have.

3. List and explain variable costs per visit that the lab will encounter.

4. The board will need to be aware that pricing may change if estimated costs are not accurate. If fixed costs end up being $397,500, how will the price breakeven change?

5. Explain how these pricing or volume changes may affect the lab.