-The Audiology Department at Randall Clinic offers many services to the clinic's patients.The three most common, along with cost and utilization data, are as follows:

 

Sevice- Variable Cost per serivce - Annual Direct costs- Annual Number of visits

Basic examination $5 $50,000 3,000
Advanced examination 7 30,000 1,500
Therapy session 10 40,000 500

 

a. What is the fee schedule for these services, assuming that the goal is to cover only
variable and direct fixed costs?

 

b. Assume that the Audiology Department is allocated $100,000 in total overhead by
the clinic, and the department director has allocated $50,000 of this amount to the
three services listed above.What is the fee schedule assuming that these overhead
costs must be covered? (To answer this question, assume that the allocation of
overhead costs to each service is made on the basis of number of visits.)