Breakeven point
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A Hospital has overall variable costs of 30% of total revenue and fixed costs of $42 million per year.
1. Compute the break-even point expressed in total revenue.
2. A patient-day is often used to measure the volume of a hospital. Suppose there are to be 50,000 patient-days next year. Compute the average daily revenue per patient-day necessary to break even.
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The solution explains how to calculate the breakeven point
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1. Break even revenue = Fixed cost/contribution margin ratio
Fixed cost ...
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