Accounting 561, Cost Accounting

Your organization (City Rehab) has been approached by an MCO looking for an exclusive arrangement for the rehabilitation
of its hip replacement patients. The MCO is aggressively positioning itself to compete in the growing Medicare managed care segment.
They have offered to guarantee 1000 patient visits per year and want to pay $70 per visit. City Rehab currently receives $95 per visit directly from Medicare. City Rehab provides 1,500 hip replacement visits per year and has the capacity to handle 500 more easily without adding any staff or equipment. The fixed costs associated with hip replacement rehab are $7,500 and the variable costs are $67 per visit.
a. What is City’s current average cost per hip replacement visit?
b. Should you take the MCO’s offer? If so, why? If not, why not?


Posted Date: 9/11/2012 2:27:05 PM | Location : United States







Related Discussions:- Accounting 561, Assignment Help, Ask Question on Accounting 561, Get Answer, Expert's Help, Accounting 561 Discussions

Write discussion on Accounting 561
Your posts are moderated
Related Questions
raw an organization chart of any actual or hypothetical manufacturing organization to show the position of management/cost accounting department within an organization and discuss

Calculate the equal monthly payments and the cost of financing on a 10-year mortgage. The cash value of the house today is $500,000. You are paying monthly at a fixed rate of 6% pe

10) Mike Taylor, the owner of Tennessee River Boat Rentals, is estimating the cost of operating his boat rental company next year. He expects to have 450 rentals during 200Z. The f

1.  Prepare a cash flow forecast for the proposal to launch SafeCus in 2010 for a three-year period from 1 January 2010 using the data in the body of the Case Study and discount at

Write a 1,200- to 1,500-word paper explaining the legal aspects, financial standards involved, and ethicality of the Excello Telecommunications case. Your paper should include the

1. The table below gives data for Southland where there are three consumption goods: bananas, coconuts and grapes. Goods Quantity in base period basket

A 1- year Canadian bond with a face value of 5000 can be purchased at 4800. a) Calculate the nominal interest rate in Canada. b) if the Canadian dollar is expected to depreci

Balance Sheet Preparation with a Missing Element The following data are available for Schubert Products Inc. as of December 31, 2012. Cash . . . . . . . . . . . . . . . . . . .

is ppe taxable

Does it make sense for PP's management to use so many discount rates in its evaluation? Explain. What additional information would you like to have to make a more informed decis