Would I have answers for the following questions?

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

a. Construct the group’s base case projected pro?t and loss statement.

b. What is the group’s contribution margin? What is its breakevenpoint?

c. What volume is required to provide a pretax pro?t of $100,000? A pretax pro?t of $200,000?

d. Sketch out a CVP analysis graph depicting the base case situation.

e. Now assume that the practice contracts with one HMO, and the plan proposes a 20 percent discount from charges.

Redoquestions a,b,c, and d under these conditions

5.6 Review the walk-in clinic data presented in Problem 5.5. Construct

projected profit and loss statements at volume levels of 8,000, 9,000,

10,000, 11,000, and 12,000 visits.

a. Assume that the base case forecast is 10,000 visits. What is the clinic’s

degree of operating leverage (DOL) at this volume level? Confirm the net incomes at the other volume levels using the DOL combined with the percent changes in volume.

b. Now, assume that the base case volume is 9,000 visits. What is the

DOL at this volume?

6.2 Refer to Problem 6.1. Assume that the three patient services departments are adult services, pediatric services, and other services. The patients services revenue and house of housekeeping services for departments are:

Department Revenue Housekeeping Hours Adult Services 3,000,000 1500

Pediatric Services 1,500,000 3000

Other Services 500,000 500

Total 5,000,000 5000

What is the dollar allocation to each patient services department if patient services revenue is used as the cost driver?

What is the dollar allocation to each patient services department if hours of housekeeping support are used as the cost driver?

What is the difference in the allocation to each department between the two drivers?

Which of the two drivers is better? Why?

7.2 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:

Service Variable Cost Annual Direct Annual # Visits per Service Fixed Costs Basic exam $5 $50,000 3,000 Advanced examination $7 $30,000 1,500 Therapy session $10 $40,000 500

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 al¬ located $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.)

c. Assume that these services must make a combined profit of $25,000 . Now what is the fee schedule? (To answer this question, assume that the profit requirement is allocated in the same way as overhead costs.)