The North Kingstown Cancer Infusion expects tremendous growth over the next year

Question

The North Kingstown Cancer Infusion expects tremendous growth over the next year and is projecting the following cost and rate structure for the service. Revenues are $750 per patient. Rent is $3600 per month; staff cost is $195,000 per month; leases are $10,000 per month; other fixed costs are $20,000 per month; pharmaceuticals are $500 per patient; intravenous supplies are $25 per patient; and other patient supplies are $25 per patient. Show your work.
a.   What volume of patients per month will it take for the center to breakeven?
b.   If the center needs to make a profit of $75,000 per month, what is the new volume per month?

Explanation / Answer

a) Fixed Cost = 3600 + 195000 + 10000 + 20000 = 228600 Variable Cost = 500 + 25 + 25 = 550 Break Even Point = 228600/(750-550) = 1143 patients

b) = (228600+75000)/550 = 552

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.