Assignment #2 page 116 & 117

End of Chapter Problems 4.1,

Assume that a radiology group practice has the following cost structure:

Fixed Cost: $500,000Variable Cost Per Procedure: $25

Furthermore, assume that the group expects to perform 7,500 procedures in the coming year.

A. What is the group's underlying cost structure?

Insert your response here.

B. What are the groups expected total cost?

Insert your response here.

C. What are the groups's estimated total costs at 5,000 procedures? At 10,000 procedures?

Insert your response here.

D. What is the average cost per procedure at 5,000, 7,500 and 10,000 procedures?

Insert your response here.

4.2 You are considering starting a walk-in clinic. Your financial projections for the first year of operations are as follows:

Number of Visits 10,000

Utilities $2,500

Wages and Benefits $220,000 Medical Supplies $50,000

Rent $5,000 Administrative Supplies

$10,000

Depreciation $30,000

Assume that all costs are fixed except supplies costs, which are variable.

a. What is the clinic's underlying cost structure?

Insert your response here.

b. What are the clinics expected total cost?

Insert your response here.

c. What are the clinic's estimated total cost at 7,500 visits? At 12,500 visits?

Insert your response here.

d. What is the average cost per visit at 7,500, 10,000 and 12,500 visits?

Insert your response here.

4.3 General Hospital , a not-for-profit acute care facility, has estimated the following costs for its inpatient services:

Fixed Costs $ 10,000,000Variable Cost Per Inpatient day$200

The hospital expects to have 15,000 inpatient days next year.

a. What is the hospital's underlying cost structure?

Insert your response here.

b. What are the hospitals expected total cost?

Insert your response here.

c. What is the hospital's estimated total cost at 12,500 inpatient days? At 17,500patient days?

Insert your response here.

d. What is the average cost per patient day at 12,500, 15,000, and 17,500 patient days?

Insert your response here.