Two-part tariffs involve two pricing components: a fixed fee to gain access to a product or service, and a price per unit of the product or service. Examples include (1) pricing at amusement parks where there is an entrance fee and a per ride fee (you can even think of situations where the per ride fee is $0 as a special case of a two-part tariff); (2) monthly charges for access to a wireless network, plus a price per minute or some other measure of data usage; (3) membership stores, where customers are charged a monthly or annual fee, but possibly lower prices on the goods sold. Health insurance can also be viewed as being like a two-part tariff. Consumers pay a fixed premium, then consume medical services, but at a reduced rate. In the first scenario (below) you are setting a price per office visit. There is no health insurance. The fixed costs, quantity, and number of patients are per year. Set a price that maximizes profits.
Fixed cost: $12,000
Marginal cost per office visit: $15

The law firm of furlan and benson accumulates costs associated with individual cases, using a job order cost system. the following transactions occurred during july: jul. 3 charged 175 hours of professional (lawyer) time to the obsidian co. breech of contract suit to prepare for the trial, at a rate of $150 per hour. 10 reimbursed travel costs to employees for depositions related to the obsidian case, $12,500. 14 charged 260 hours of professional time for the obsidian trial at a rate of $185 per hour. 18 received invoice from consultants wadsley and harden for $30,000 for expert testimony related to the obsidian trial. 27 applied office overhead at a rate of $62 per professional hour charged to the obsidian case. 31 paid administrative and support salaries of $28,500 for the month. 31 used office supplies for the month, $4,000. 31 paid professional salaries of $74,350 for the month. 31 billed obsidian $172,500 for successful defense of the case. required: a. provide the journal entries for each of these transactions. refer to the chart of accounts for exact wording of account titles. b. how much office overhead is over- or underapplied? c. determine the gross profit on the obsidian case, assuming that over- or underapplied office overhead is closed monthly to cost of services.