Assume that WellCare Center has two categories of patients: • Government-insured patients pay $70.00 per day Private pay patients are charged a variable rate, but 15% of their charges are not collected If 60% of the patients are government-insured and 40% are private pay, what private pay rate must be set to generate $200,000 in profit? • Variable costs = $50.00 per day Fixed costs $1,200,000 Expected volume = 60,000 patient days
Assume that WellCare Center has two categories of patients: • Government-insured patients pay $70.00 per day Private pay patients are charged a variable rate, but 15% of their charges are not collected If 60% of the patients are government-insured and 40% are private pay, what private pay rate must be set to generate $200,000 in profit? • Variable costs = $50.00 per day Fixed costs $1,200,000 Expected volume = 60,000 patient days
Chapter5: Gross Income: Exclusions
Section: Chapter Questions
Problem 39P
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Please provide the accurate answer to this general accounting problem using valid techniques.
Transcribed Image Text:Assume that WellCare Center has two categories of
patients:
•
Government-insured patients pay $70.00 per
day
Private pay patients are charged a variable rate,
but 15% of their charges are not collected
If 60% of the patients are government-insured and
40% are private pay, what private pay rate must be
set to generate $200,000 in profit?
•
Variable costs = $50.00 per day
Fixed costs $1,200,000
Expected volume = 60,000 patient days
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