A Clinic Uses Doctors and Nurses Optimally and Is Servicing

question 94

Multiple Choice

A clinic uses doctors and nurses optimally and is servicing the maximum number of patients given a limited annual payroll.The last doctor hired treated 1,600 extra patients in a year,while the last nurse hired treated 1,000 extra patients in a year.If doctors make $64,000 a year and nurses make $40,000 a year,then

• A)the clinic could serve more patients by hiring more doctors and fewer nurses.
• B)the clinic could serve more patients by hiring fewer doctors and more nurses.
• C)the clinic is making the correct decision.
• D)the clinic is not making the correct decision because the additional patients per dollar spent on doctors is greater than the additional patients per dollar spent on nurses.
• E)a and d

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Definitions:

Normal Balance

The side of the account (debit or credit) on which increases to the account are recorded.

Gross Method

An accounting practice where invoice transactions are recorded at their full, or gross, amounts before any discounts are applied.

Periodic Inventory Method

An accounting approach where inventory is physically counted at specific intervals to determine the cost of goods sold.