CHC currently had a staff of thirteen. Two registered nurses two physical therapists and two socia Show more CHC currently had a staff of thirteen. Two registered nurses two physical therapists and two social workers were responsible for the home health visits. The administration consisted of a director an assistant director a supervising psychologist the newly appointed controller and a support staff of three. The skilled nursing care visits were handled by the two registered nurses. The two physical therapists worked exclusively on patient visits. The social workers under the guidance of the psychologist (who made no visits) provided all the social service visits. The two registered nurses who handled all nursing visits could provide as many as seven visits a day each. However because the case visits varied significantly in time effort and location each nurse averaged only 5.5 visits per day. The physical therapists averaged 3.3 visits per day each although Ms. Tucker thought their capacity could be increased by at least 33 percent if the agency had the demand. The social workers averaged 4.5 visits a day each but Ms. Tucker thought these could be increased to about 5.5 a day. The CHC staff each worked an average of 240 days a year. Before Mr. Blanchard accepted the position of controller Louis Tucker the agencys director briefed him on the agencys financial position. Like many home care agencies CHC had become affiliated with a large health maintenance organization (HMO). The HMO paid a fixed fee of $110 to CHC for each home visit. Identify CHCs fixed and variable costs What is the breakeven point? What assumptions did you have to make in answering Questions 1 and 2 EXHIBIT 1: Expense Record for Carlsbad Home Care Detail Total Salaries $567994 Director Asst. Director Controller $165140 Nurses (2) $105920 Psychologist (1) $56000 Social Workers (2) $77000 Physical Therapists (2) $90334 Support Staff (3) $73600 Transportation Costs $ 56000 Auto operation and insurance $ 16000 Auto allowance for staff $ 40000 Purchased services $ 4700 Medical and nursing supplies $ 14800 Space occupancy costs $ 34660 Office costs (telephone postage stationary) $ 25312 Other general costs $ 35720 TOTAL COSTS $739186 No. of visits 6384 AVG. COST/VISIT $115.79 Show less
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