What is cost-volume-profit analysis

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Reference no: EM133249336

Assignment - Gapenski's Healthcare Finance - An Introduction to Accounting and Financial Management, Seventh Edition, Reiter & Song, HAP Publishing, Chicago IL. ISBN 9781640551862

Questions -

1. Explain the differences between fixed costs and variable costs.

2. What components make up total costs?

3. a. What is cost-volume-profit (CVP) analysis?

b. Why is it so useful to health services managers?

4. a. Define contribution margin.

b. What is its economic meaning?

5. a. Write out and explain the equation for volume breakeven.

b. What role does contribution margin play in this equation?

6. What elements of profit analysis change when a provider moves from a fee-for-service to a discounted fee-for-service environment?

7. What are the critical differences in profit analysis when it is conducted in a capitated environment versus a fee-for-service environment?

8. How do provider incentives differ when the provider moves from a fee-for-service to a capitated environment?

9. a. What cost structure is best when a provider is primarily capitated? Explain.

b. What cost structure is best when a provider is reimbursed primarily by fee-for-service? Explain.

Reference no: EM133249336

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