Question: From this financial information, calculate the three RVU calculations: Average and Marginal Costs per RVU, Total Average Cost, and Total Marginal cost per CPT code.

  1. From this financial information, calculate the three RVU calculations:
  2. Average and Marginal Costs per RVU,
  3. Total Average Cost, and
  4. Total Marginal cost per CPT code.
    1. Calculate the costs,
    2. Show your calculations

Use the following assumptions:

Assume that during the FY2016 year, Lovely Life LLC historical costs were $750,000 when 11,000 RVUs were produced and $950,000 when 14,000 RVUs were produced. The contract specifies that the number of RVUs per service CPT code are five (5).

High Total Fixed Costs

$950,000

#RVUs high point

14,000

Low Total Fixed Costs

$750,000

#RVUs low point

11,000

#RVUs per CPT

5

Projected #RVUs for the coming month

10,000

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