Make or Buy

Rastad Rahany, MD$,$ is a general practitioner whose offices are located in the South Falls Professional Building. In the past, Dr$.$ Rahavy has operated his practice with a nurse, a receptionist$/$secretary$,$ and a part$-$time

boo$-$feeper. Dr$.$ Rahuyy. like many small$-$town physicians, has billed his patients and their insurance companies from his own office. The part$-$time bookkeeper, who works $10$ hours per week, is employed exclusively for ths

purpose.

Nort Fats Physician's Service Center has offered to take over all of Dr$.$ Rahayy's billings and collections for an annual fee of $$6,000.$ If Dr$.$ Rahavy accepts this offer, he will no longer need the bookkeeper. The bookkeeper $

wages and fringe benefits amount to $$15$ per hour, and the bookkeeper works $50$ weeks per year. With all the billings and collections done elsewhere, Dr$.$ Rahavy will have two additional hours available per week to see

patie ta$.$ He sees an average of three patients per hour at an average fee of $$30$ per visit. Dr$.$ Rahavy's practice is expanding, and new patients often have to wait several weeks for an appointment. He has resisted expand $1g$

his $0$ fice hours or working more than $50$ weeks per year. Finally, if Dr$.$ Rahavy signs on with the center, he will no longer need to rent a records storage facility for $$100$ per month.

Conqugr a releart cost analysis to determine if it is profitable to outsource the bookkeeping.

Cata fre the net advantage $($disadvantage$)$ of outsourcing the bookkeeping,

Use a necutive sien with your answer to indicate a net disadvantage, if applicable.