Accounting: Break-Even Points
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49. San Juan Health Department's dental clinic projects the following costs and rates for the year 20XX.
Total fixed costs $175,000
Variable costs $48 per patient
Charges $150 per patient
a. Using this information, determine the break-even point in patients.
b. Using this information, determine the break-even point in dollars.
c. Graph this scenario in a break-even chart using a range of 0 to 3,500 patients in 500-patient increments.
d. If the clinic decides it would like to make a profit of $5,500, what is the new break-even point in patients?
e. If the clinic decides it would like to make a profit of $5,500 at 1,770 patients, what is the new break-even point in dollars?
50. Calculating break-even. Jasmine Gonzales, administrative director of Small Imaging Center, has been asked by the practice members to see if it is feasible to add more staff to support the practice's mammography service, which currently has 2 analogue film or screen units and 2 technologists. She has complied the following information:
What is the monthly patient volume needed per month to cover fixed and variable costs?
Reimbursement per screen $66.05
Equipment costs per month $1,450.00
Technologist cost per mammography $15.60
Technologist aide per mammography $3.10 5.
Variable cost per mammography $15.00
Equipment maintenance per month per machine $919.66
b. What is the patient volume needed per month if Small Imaging Center desires to cover its fixed and variable costs and make a $5,000 profit on this equipment to cover other costs associated with the organization?
c. If reimbursement decreases to $60 per screen, what is the patient volume needed per month to cover fixed and variable costs but not profit?
d. If a new technologist aide is hired, what is the patient volume needed per month at the original reimbursement rate to variable costs, but not profit?
51. Laurie Vaden is a physician with her own practice. She has developed contract with several employers to perform routine exams, fitness-for-duty exams, and initial screening of on-the-job injuries. She provides 100 exams per month, charging $100 per exam. Under this contract, she estimates her avoidable fixed costs attributable to the exams are $1,000 per month, and she pays a lab an average of $15 per exam. She has decided she needs to increase profit, so she is considering raising her fee to $125, even though there may be a 10 percent loss in the number of exams she does per month. Determine the current and predicted: variable costs, and total contribution margin. What do you recommend she do? Why?
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Solution Summary
The break-even points for the dental clinic projects. The costs and rates for the year are given.
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