You are considering starting a walk-in clinic. Your financial projections for th

Question

You are considering starting a walk-in clinic. Your financial projections for the first year of operations are as follows: Revenues (10,000) $400,000 Wages and Benefits $220,000 Rent 5,000 Depreciation 30,000 Utilities 2,500 Medical Supplies 50,000 Administrative Supplies 10,000 Assuming that all cost are fixed except supply costs, which are variable. Furthermore, assume that the clinic must pay taxes at a 30%.

WHAT GOES IN THE REVENUE PER PROCEDURE HIGHLIGHTED BOX

WHAT NUMBER GOES IN THE "PROCEDURE" HIGHLIGHTED BOX

WHAT NUMBER GOES IN THE "FIXED COST" HIGHLIGHTED BOX

as calculations are already in excel sheet. these other numbers are needed

Problem 5.5 10,000 procedures Variable costs Med supplies per procedure Admin supplies per procedure Contribution margin Fixed costs Net income before taxes Taxes Net income 30% Contribution margin Revenue per procedure Variable cost per procedure (S6) Break even volume Target profit $142,857 $142,857 Target CM CM per unit Required procedures (23,810)

Explanation / Answer

Prob 5.5) amount $ Reve 10000 procedures 400000 Less: Variable costs: Procedures 10000 Med supplies per procedure $5 -50000 Admin supplies per procedure $1 -10000 Contribution 340000 Less: Fixed Costs: -257500 Net income before taxes 82500 Taxes 30% -24750 Net Income   57750 b. Contribution margin: Revenue per procedure $40 Variable cost per procedure $6 Contribution per unit $34 Contribution margin: 34/40=85% Fixed Costs $257,500 Break even volume FC/contri per procedure 257500/34=7573.53 procedures c. Target profit $142,857 add: Fixed costs 257500 Target Contribution $400,357 CM per unit $34 Required procedures 400357/34=11775.21

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