Better Chronic Care Organization
Try to estimate Revenues and expense for the first year and create an estimated Income
Statement and Balance Sheet (you may look at existing, perhaps newer companies, of the
same organization form) to do this. If so, name the company).
Determine what the breakeven level of service would be, and discuss how you may want to
adjust the companies operating leverage in light of your calculation.
Explain what method you would use to allocate costs, and why (Cost driver, Traditional
(Direct, Reciprocal, or Step-down) or Activity Based). Again, discuss the pros and cons of each
that led to your decision.
Describe how you will settle on pricing (price setter or price taker, target costing or Full Cost
pricing or marginal cost pricing).
A summary of if you think the organization will be successful or not.
Again, for each of these, describe your decision making process, the pros and cons of different
options, and specifically why you settled on the decision you made.
