Question

the month of June, a clinic had 3,000 patients at an average price of SR300. During the month, fixed costs were SR180,000 and variable costs were SR210 per patient. The relevant range is 2000-4500 patients per month
Required
1. Calculate the contribution margin
2. Calculate the break-even point
3. Calculate the number of patients needed to achieve a profit of SR135,000
4. Prepare the projected P&L statement
5. If the clinic received an offer from the neighborhood school; 1,000 patient (SR250 per patient), would the reject or accept the offer? Why?
6. How would this effect the clinic's decision (in no. 5) if the offer is 2000 patient?

Answer 1