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.

• explain variable and fixed costs for healthcare services in the lab.
• Figure the price breakeven for the clinic.
• List and explain fixed costs that the lab will have.
• List and explain variable costs per visit that the lab will encounter.
• 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?
• Explain how these pricing or volume changes may affect the lab.

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