The audiology department at Randall Clinic offers many services to the clinic's patients. The three...
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Accounting
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 Costs
Annual Number of Visits
Basic examination
$4.8
$45295
3371
Advanced examination
6.7
31253
1764
Therapy session
9.1
44279
431
Assume that the audiology department is allocated $100000 in total overhead by the clinic, and the department director has allocated $51988 of this amount to the three services listed above. What is the fee schedule for the basic examination service, assuming that the goal is to cover variable and direct fixed costs as well as overhead costs? (To answer this question, assume that the allocation of overhead costs to each service is made on the basis of number of visits.)
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