[Requires Chapter 2] Data for the Most Recent Four Months

question 81

Essay

[Requires Chapter 2] Data for the most recent four months of operations for the Newtown Family Practice Clinic appear below:
March April May
Patient-visits 1,600 1,500 1,900
Costs:
Physicians' salaries $60,000 $60,000 $ 90,000
Nurses' salaries 20,000 20,000 30,000
Supplies 2,100 2,250 2,850
Utilities 600 480 400
Rent 1,000 1,000 1,000
Miscellaneous 9,400 9,000 10,600
Total $86,000 $85,680 $125,930
At the beginning of May, part-time employees were hired to handle increasing numbers of patients.
a)Newtown Family Practice Clinic is a not-for-profit medical clinic serving low income patients. Develop a cost function that can be used to forecast June costs. Explain the decisions you made in developing the cost function.
b)If the average fee per patient-visit is $60, estimate how many patient-visits would be required in June to break even.
c)If 1,900 patient visits are expected during June, what average fee must be set for the clinic to break even?
d)List factors that would affect patient volumes in a medical clinic.