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In: Accounting

Occupational Therapy of Your Area (OTYA) wants to figure out the average cost of three physical...

Occupational Therapy of Your Area (OTYA) wants to figure out the average cost of three physical therapy services. The practice uses a cost of $60 per RVU for its physical therapists, who are all contract workers paid by the relative value units they create. Physical therapy aides are paid $20/hr. They spend 15 minutes per service. The administrator of OTYA believes that RVUs are a solid way to reflect the cost of space, equipment use and administration. The total cost is $300,000.

Service

Average physical therapist time/service

Supplies/service

RVUs/

service

Service Volume

PT- basic

30 min.

$10

2

1250

PT-mid

60 min.

$15

3

1000

PT-intense

75 min.

$20

6

750

  1. What is average cost (per visit) for each type of visit?
  2. One of the employees asks for your help in using this average cost information for budgeting purposes to project costs for various levels of expected output. How would you respond?

Solutions

Expert Solution

ekkarill92 answered 2 years ago
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