Determine the best sales mix

Reference no: EM13211519

Sales Mix DecisionDr. Massy, who specializes in internal medicine, wants to analyze his sales mix to find out how the time of hisphysician assistant, Consuela Ortiz, can be used to generate the highest operating income.Ortiz sees patients in Dr.Massy's office, consults with patients over the telephone, and conducts one dailyweight-loss support group attended by up to 50 patients.Statistics for the three services are as follows:Office VisitsPhone CallsWeight-Loss SupportGroupMaximum numberof patient billings per day204050Hours per billing.25.101.0Billing rate$50$25$10Variable costs$25$12$5Ortiz works seven hours a day.Required

1. Determine the best sales mix. Rank the services offered in order of their profitability.

2. Based on the ranking inI,how much time should Ortiz spend on each service in a day? (Hint:Remember to consider the maximum number of patient billings per day.) What would be the daily totalcontribution margingenerated by Ortiz?

3. Dr. Massy believes the ranking is incorrect. He knows that the daily 60-minute meeting of the weight-loss support group has 50 patients and should continue to be offered.If the new ranking for theservices is (1)weight-loss support group, (2) phone calls, and (3) office visits, how much time shouldOrtiz spend on each service in a day?

What would be the total contribution margin generated by Ortiz,assuming the weight-loss support group has the maximum number of patient billings?

4.Manager Insight:Which ranking would yourecommend? What additional amount of total contributionmargin would be generated if your recommendation is accepted?

Reference no: EM13211519

Questions Cloud

Compute constant mass by heating in a crucible : A sample of CuSO4+5H2O and an inert material was dried to constant mass by heating in a crucible. From the data below, what is the calculated percent CuSO4+5H2O in the Sample?

What is its wacc rounded to two decimal places : How much of the new investment must be financed by common equity - What is its WACC rounded to two decimal places

Define magnetic field : When a magnetic sector instrument was operated with an accelerating voltage of 2500 V, a magnetic field of 0.4 Tesla was required to focus on the CH4+ on the detector.

Explain an explanation concerns the 4f orbitals : The period 6 transition metals have greater densities than either the period 4 or 5 transition metals. An explanation concerns the 4f orbitals

Determine the best sales mix : Determine the best sales mix. Rank the services offered in order of their profitability and based on the ranking inI,how much time should Ortiz spend on each service in a day?

State decomposes entirely to mercury metal and oxygen gas : A sample of mercury(II) oxide is placed in a 5.00 L evacuated container and heated until it decomposes entirely to mercury metal and oxygen gas

State the standardized hydrochloric acid solution : A "little more" than 5 mL of a saturated solution of borax is transferred to the corresponding calibrated test tube and subsequently titrated with the standardized hydrochloric acid solution.

Determine the increase in the annual after-tax profits : Accurately derived the formula to determine the increase in the annual after-tax profits by selecting the optimal transfer price and accurately calculated the optimal transfer price.

Explain what is the exit temperature : operating a heat exchanger with pentane and propane. 100 mol/h pentane enters at 300 C and leaves at 400 C. 100 mol/h propane enters at 600 C. What is the exit temperature?

User Account

All Pages