Question

These health centers have a wide variety of costs with different behaviors. Consider these six areas of service taken from the graphic above:

Pharmacy

Dental

Behavioral/mental health

Laboratory testing (bloodwork)

Xray and Diagnostic testing (like MRI's, Cat Scans, Xrays)

Being seen by a doctor, nurse practitioner(NP), Physician's Assistant (PA) or Certified Nurse Midwife (CNM's) for a medical examination or medical procedure

Pick one of the six areas listed above. Identify a variable cost, a fixed cost, an a mixed cost that most likely would be incurred by the clinic for the service you pick for your discussion. You'll have to use your imagination. You might visualize your experience when you last went to any kind of medical center/ physican's office to help you think of possible costs.

Two of the three costs (variable, fixed, or mixed) are influenced in total by a change in the volume of the cost driver. Identify a possible cost driver for those two costs.

Your discussion post should be at least approximately 75 words or more.

Answer 1

In the above question I would like to choose Dental area from the list. After visualizing the experience when I last visited a dentist, I could figure out the following costs:-

Fixed Cost

Rent of the premises

Salary paid to the receptionist

Variable Cost

Dental supplies. The cost driver would be number of patients visited

Mixed Cost

Electricity would be a mixed cost because electricity bill can be divided into two parts – (1) line rent and (2) cost of units consumed. Therefore, the cost driver in this type of cost would be the number of units consumed.