Laurie vaden is a physician with her own practice she has

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Laurie Vaden is a physician with her own practice. She has developed contract with several employers to perform routine exams, fitness-for-duty exams, and initial screening of on-the-job injuries. She provides 100 exams per month, charging $100 per exam. Under this contract, she estimates her avoidable fixed costs attributable to the exams are $1,000 per month, and she pays a lab an average of $15 per exam. She has decided she needs to increase profit, so she is considering raising her fee to $125, even though there may be a 10 percent loss in the number of exams she does per month. Determine the current and predicted: variable costs, and total contribution margin. What do you recommend she do? Why?

Reference no: EM13483211

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