Fundamentals of healthcare finance end of chapter problems

Module 2 Homework: Cost

In Chapter 4 of Fundamentals of Healthcare Finance, you read about cost and different methods of allocation.

Please download and complete Module 2 Assignment. Submit the completed assignment (worth 5 points) in this drop box by Sunday before midnight EST.

Save your homework assignment using the following file-naming format to receive full credit: HSA3170_Mod 2HW_Last Name.
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HSA: Health Care Finance

Module Two Assignment

In Chapter 4 in your book, you learned about cost.Use what you have learned in your readings to complete the following problems.Show all work for full credit.

1.(2 pts) Assuming that your fixed costs for a Rehabilitation Center are $125,000 per year.Your average variable expenses come to $25 per procedure.

a. What are your total fixed costs if you perform 10,000 procedures?

b. What would they be if the volume increased to 20,000 procedures?

2. (2 pts) Assuming that you have two departments in this Rehabilitation Center, PT and OT.The cleaning crew that services the building spends 30% of their time in PT, and 70% in OT due to the square footage that each department uses.

a. What would be the allocation be to PT if the total annual cost of housekeeping is $20,000?

b. What would be the allocation be to OT if the total annual cost of housekeeping is $20,000?

3. (1pt) If you looked at billing for this center, and decided to use the Activity-Based Costing method, what would the allocation of Check-In cost be to PT for 6,000 procedures considering the following information: