Shannon oneal / 9/24/18 12:35 PI 01.1702 Submit Te This Test: 47 pts possib est:

Question

Shannon oneal / 9/24/18 12:35 PI 01.1702 Submit Te This Test: 47 pts possib est: Test 1 is Question: 1 pt 12 of 47 (9 complete) Dr salary of one more technician Each new patient is expected to bring in $2.930 per year in additional revenue, with s an orthodontist. She estimates that adding two new chairs will increase fixed costs by $148,000, including the annual equivalent cost of the capital investment and the vaniable costs estimated at $960 per patient. The two new chairs wi allow Dr. Gulakowicz to expand her practice by as many as 205 patients annually How many patients would have to be The break even volume is patients. (Enter your response rounded to the nearest whole number s that adding two new chairs will Dr Gula

Explanation / Answer

Let number of patients to be added to breakeven = N

Additional revenue to be brought in by N patients = $2930.N

Additional cost incurred

= Additional fixed cost + additional Variable cost

= Additional fixed cost + additional variable cost / unit x N

= $148,000 + $980.N

At breakeven point ,

Total revenue = Total cost .

Therefore ,

2930.N = 148000 + 980.N

Or, 1950.N = 148000

Or, N = 148000/ 1950

Or, N = 75.89 ( 76 ROUNDED TO NEAREST WHOLE NUMBER )

Number of patients to be added =76

Number of patients to be added =76

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