The Audiology Department at Randall Clinic offers many services to the clinic's patients.The three most common, along with cost and utilization data, are as follows:

a. What is the fee schedule for these services, assuming that the goal is to cover only variable and direct fixed costs?

b. Assume that the Audiology Department is allocated $100,000 in total overhead by the clinic, and the department director has allocated $50,000 of this amount to the three services listed above.What is the fee schedule assuming that these overhead costs must be covered? (To answer this question, assume that the allocation of overhead costs to each service is made on the basis of number of visits.)

Transcribed Image Text:

Service- Variable Cost per service Annual Direct costs- Annual Number of visits Basic examination $5 $50,000 3,000 Advanced examination 7 30,000 1,500 Therapy session 10 40,000 500 Service- Variable Cost per service Annual Direct costs- Annual Number of visits Basic examination $5 $50,000 3,000 Advanced examination 7 30,000 1,500 Therapy session 10 40,000 500

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