An ophthalmology practice is analyzing it outputs, cost, and prices to determine if changes are needed. The practice provides five types of eye surgery: Lasik, Photorefractive keratectomy, Lens implants, Cataract surgery and Vitrectomy. Current output costs are based on total practice costs of $2,000,000 and the physician’s assessment in 2016 of how much time she devotes to each type of surgery (surgery is performed twice per week or 768 hours per year are devoted to surgery).
Calculate cost per output given the physician’s time estimate, do current prices cover costs?
Surgery Price % Time Quantity Cost/Output
Lasik $800 30% 847 _________
Photorefractive keratectomy $700 20% 491 _________
Lens implants $1,000 25% 523 _________
Cataract surgery $900 15% 264 _________
Vitrectomy $1,200 10% 239 _________