ASSIGNMENT 2 - ASSIGNMENT 2 HSA 525 Ruger Clinic 1. WHAT IS...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
ASSIGNMENT 2 HSA 525 Ruger Clinic 1. WHAT IS THE VALUE OF THE COST POOL? 100,000 2. WHAT IS THE ALLOCATION RATE IF: A. Patient services revenue is used as the cost driver? 100,000/5,000,000=$0.02 per patient service revenue
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
B. HOURS OF HOUSKEEPING SERVICES IS USED AS THE COST DRIVER? $100,000/5000=$20 per housekeeping hr. 3. WHAT IS THE COST-VOLUME-PROFIT (CVP) ANALYSIS AND WHY IS IT USEFUL TO HEALTH SERVICES MANAGERS? The profit analysis is an analytical technique used to analyze the effect of volume changes on profit. The same procedures can be used to assess the effects of volume changes on cost, so this type of analysis is often called cost-volume-profit(CVP) analysis. Cost-volume profit analysis is a simple but flexible tool for exploring potential profit based on cost strategies and pricing decision while it may not provide detail analysis. Even entities without a profit goal find CVP useful. Government agencies use the analysis to determine the level of service appropriate for projected revenues. Non-profit agencies increasingly stipulating fees for service can explore-fee pricing options; in many cases, the recipients are especially price-sensitive due to income or health concerns (LOUIS C. GAPENSKI, HEALTHCARE FINANCE, FOURTH EDITION, 2008, PP134-135) CVP analysis allows managers to examine the effects of alternative assumptions regarding costs,
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 6

ASSIGNMENT 2 - ASSIGNMENT 2 HSA 525 Ruger Clinic 1. WHAT IS...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online