rate must be set

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rate must be set
(TCO 4) Based on the information below, what rate must be set to generate the required $80,000 i…

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rate must be set

rate must be set

A+ Midterm Exam

(TCO 4) Based on the information below, what rate must be set to generate the required $80,000 in profit in the preceding example?
You have been asked to establish a pricing structure for radiology on a per-procedure basis. Present budgetary data is presented below:

Budgeted Procedures$10,000
Budgeted Cost$400,000
Desired Profit$80,000

It is estimated that Medicare patients comprise 40 percent of total radiology volume and will pay on average $38.00 per procedure. Approximately 10 percent of the patients are cost payers. The remaining charge payers are summarized below:

PayerVolume%Discount%
Blue Cross204
Unity PPO1510
Kaiser1010
Self Pay540
 50% 

What rate must be set to generate the required $80,000 in profit in the preceding example?

Desired revenue = Budgeted Cost + Desired profit = $400,000+…