One of the downsides to risk sharing is that it encourages clinics to avoid patients requiring substantial care -- this is another means by which profitability can be improved. This has in the past resulted in consumer backlash against the practice. However, the risk-sharing partner (insurance company) will often avoid contracts that see it deliver unreasonable payments to the HMO. What we can expect are contracts that deliver us a relatively slim margin. This should encourage us to find ways to reduce costs, either through improved patient throughput, use of generic drugs, use of more efficient procedures and increasing the productivity of our staff, our equipment and our facilities capacity.
If we have a risk contract that is based on payment per patient, this has the same effect, but at least allows us to...
Problem 12-34-1. Gross margin is calculated as gross profit / revenue. Product a Product B Product C Product D Gross Margin 12,000 / 32,000 = 37.5% 17,600 / 88,000 = 20% 56,000 / 280,000 = 20% 63,000 / 144,000 = 43.75% The product that is the most profitable is Product D. 2. The best way to start this question is to figure out the price and COGS per unit for each product. For Product a, the price was $32,000 / 2900
33% 400000 53.33% 480000 53.33% FM 125,000 125,000 125,000 FSA 25,000 25,000 25,000 Net Income 170,000 28.33% 250,000 33.33% 330,000 36.67% 2. The manager's tabulation is incorrect because the manager has set $2 as the fixed cost per unit. This is only true at the 200,000 unit level. At the other levels, the fixed cost per unit will be lower, as fixed costs do not increase with production volume. 6-47. 1. In order to make this assessment, Dana needs to calculate which method is cheaper. The accounting for producing the parts
So for the 70,000 units completed in July: (70,000)(15 + 10.65) = $1,795,500 2. The ending works in progress is 20,000. The total cost should be (20,000)(25.65) = 513,000 Note: These figures represent the total cost of the goods, not the total cost in July of the goods. The question is worded a little bit funny so I wasn't sure which one it was intended to be. Problem 14-21. Problem 14-21 1 2 3 4 DM Inv, 2010 8 8 5 2 Purchased 5 9 10 8 Used 7 11 7 3 DM Inv,
b) 1) ($20-$5) = $15; $1,200,000 / 15 = 80,000 units 2) if the company wants to sell just 70,000 units, then the price needs to be calculated again using the same formula as was used above: 70,000P -- (70,000*5) -- 1,200,000 = 0 70,000P = 1,550,000 P = $22.15 c) 1) This question is a bit silly. The formula would have one variable, x, to represent both the old and new sides: 19x -- 5x
The passenger miles would be (1,500,000 * 1.1) = 1,650,000. The revenue per passenger mile would be $0.20 -- (.08*.2) = $0.184 So the actual revenue was (.184)*(1,650,000) = $303,600. Now we can calculate Flex for Actual Level, the third column. This is based on the flex budget figures, which were $0.20 in revenue per passenger mile. Variable expenses were 195,000 / 1,500, 000 = $0.13 per passenger mile in the
4) Consider a firm that has just built a plant, which cost $20,000. Each worker earns $5.00 per hour. a) Based on this information, fill in the table below. Number of Worker Hours Output Marginal Product Fixed Cost Variable Cost Total Cost Marginal Cost Average Variable Cost Average Total Cost 0 0 20,000 50 8 20000 20,250 5 5 10 20000 20,500 5 5 8 20000 20,750 5 5 6 20000 21,000 5 5 4 20000 21,250 5 5 85 1900 2 20000 21,500 5 5 71.67 1950 1 20000 21,750 5 5 62.14 b) In the example above, what price must the firm receive in order to keep producing in the short run? The price the firm must receive in the short run is the price that covers the variable cost, so the firm
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