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 per service Annual Direct Fixed cost Annual Number of Visits
Basic Examination $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 cost?
b. What is the fee schedule for these services, assuming that the goal is to cover only variable and direct fixed cost?
Insert your response here.
c. Assume that the Audiology Department is allocated $100,00 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 cost 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.