Answered step-by-stepNote: Please provide proper calculations and explanations....
Note: Please provide proper calculations and explanations.
Jamestown Clinic has the following fixed and variable costs:
| Variable Costs Per Patient | Fixed Costs Per Year | ||
| Personnel | $150 | Rent | $100,000 |
| Supplies | 20 | Administration | 120,000 |
| Laundry | 30 | Other | 80,000 |
| Other | 50 | ||
| Total | $250 | Total | $300,000 |
1. What are the fixed, variable, total and average costs per patient for volumes of 100, 500, 1,500, 2,500, and 3,000?
2. An outside organization such as a health maintenance organization, offers to send Jamestown 500 patients per year but offers to pay only $300 for each one. Should Jamestown agree to this arrangement? It currently has 2,500 patients per year but can easily handle 3,000. Make sure to justify your decision with calculations (a simple yes or no will not be accepted).
Answer & Explanation
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