Accounting 561, Cost Accounting

Assignment Help:
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?



Related Discussions:- Accounting 561

Determine when to stock, Determine When to Stock It will be influence ...

Determine When to Stock It will be influence with the inventory system in place as given: 1. Periodic order system. The firm obtains a new order of the amo

What is a statement of cash flows, 1.What is a Statement of Cash Flows? How...

1.What is a Statement of Cash Flows? How does it differ from an Income Statement? 2.What unique information does the Statement of Cash Flows deliver to investors? Why do they care?

Engineering method of cost estimation, Engineering Method of Cost Estimatio...

Engineering Method of Cost Estimation This method is based on a detailed study of each operation whereas careful requirement is made for materials, labour and equipment essent

What was the cost of raw materials, Raw Materials: Manufacturing Overhead B...

Raw Materials: Manufacturing Overhead Bal 1/1: 36,000 Credits: ? Debits: 383,000 Credits: ? Debits: 470,000 Bal: 12/3: 156,000 Work in Process: Bal 1/1: 73,000 Credits: 770,000

Standard costing, behavioral aspect of standard costing

behavioral aspect of standard costing

Calculate break even point using a mathematical equation, Smart Ltd ha sa u...

Smart Ltd ha sa unit selling price of $500 variable costs per unit of $325 and fixed costs of $140 000. Calculate the break even point in units using (a) a mathematical equations a

Opportunity costs are relevant costs, Opportunity Costs Are Relevant Costs ...

Opportunity Costs Are Relevant Costs Opportunity cost introduces an additional concept that is not available like part of normal cost analysis in the accounting record system.

Determine the total cost and product costing method, Question Hornsby M...

Question Hornsby Manufacturing has four categories of overheads. The four categories and the expected overhead costs for each category for next year are as follows:

Sales budget, Sales Budget It provides volume of sales and sales mix o...

Sales Budget It provides volume of sales and sales mix of the recent operations. The sales forecast is initially prepared and upon completion the sales budget is finalized. Th

Prepare a balance sheet for schubert products inc, Balance Sheet Preparatio...

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

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd