Seattle Grace Hospital plans to invest in a new piece of CT imaging equipment. T

Question

Seattle Grace Hospital plans to invest in a new piece of CT imaging equipment. The hospital estimates that it can bill $1,500 per scan. Preliminary market assessments indicate that demand will be fewer than 5,000 scans per year. The hospital is considering a scanner (scanner B) that will result in total fixed costs of $800,000 per year and would yield a profit of $450,000 per year if the hospital produced and billed for 5,000 scans. What is the estimated breakeven volume for scanner B (in number of scans)?

A)3,200

B) 160

C)834

D) 5,000

E) 250

Explanation / Answer

Breakeven Point for scanner B = fixed cost / $1500

So, 800000 /1500 = 534 Units

Thanks

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