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

Using the dupont formula for rate of return on investment, The vice preside...

The vice president of operations of six layer computer Inc. is evaluating the performance of two divisions organized as investments centers. Invested assets and condensed income st

Commodities to stock, Commodities to Stock Employ Material Req...

Commodities to Stock Employ Material Requirement Planning From the Master Production Schedule the manager has determined such the products to be produced. A

Calculated the net working capital, Balance Sheet                      ...

Balance Sheet                                                                      2010                2011             Assets Cash

Marginal costing, The profit volume ratio of xltd. is 50% and the margin of...

The profit volume ratio of xltd. is 50% and the margin of safety is 40%.you are required to calculate the net profit if sales volume is rs.100,000?

Zero based budgeting, Zero Based Budgeting It is referred to also lik...

Zero Based Budgeting It is referred to also like priority based budgeting. It is a cost advantage approach budgeting where it is assumed that the cost allowance is Zero for a

Material cost control, Material Cost Control Therefore Materials form ...

Material Cost Control Therefore Materials form an important cost of output units and that should be controlled.  Material Control is more than merely recording the accounting

Costs and revenues over a range of activity levels, 1. Single product or si...

1. Single product or single mix of products 2. Variable cost, fixed cost and selling price are constant 3. The level of production will equal the level of sales Example:

Cost data determination, Cost Data Determination How does one decide th...

Cost Data Determination How does one decide the cost data for products and the services which are the end result of the productive processes? The response to this question is m

Marginal costing and marginal cost, Marginal Costing and Marginal Cost ...

Marginal Costing and Marginal Cost Marginal Costing is an optionally method of costing to absorption costing , In marginal costing, merely variable costs are charged like a

Chapter 4 Fundamentals of Cost Analysis for Decision Making, 31. Special Or...

31. Special Orders Maria’s Food Service provides meals that nonprofi t organizations distribute to handicapped and elderly people. Here is her forecasted income statement for April

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