Activity: You have been asked to establish a pricing structure for radiology on a per-procedure basis. Present budget data is presented below:

Budgeted procedures:         10,000

Budgeted cost                  $400,000

Desired profit                       $80,000

It is estimated that Medicare patients comprise 40 percent of total radiology volume and will pay on average $38 per procedure. Approximately 10 percent of the patients are cost payers. The remaining charge payers are summarized below:

Payer Volume% Discount %

Blue Cross   20          4

Unity PPO   15        10

Kaiser           10        10

Self-pay         5        40

                        50%

2. What rate must be set to generate the required $80,000 in profit in the preceding example?