Question

A. The expected annual utilization is 10,000 visits. The variable cost is $5 per visit, fixed cost is $500,000 per annum and overhead allocation is $50,000 per annum. Breakeven price can be calculated with the help of this formula:

Breakeven per visit price = total cost incurred on service / total number of visits

A. What is the breakeven cost for the company? Show your work please.

B. Desired profit is that amount which the company wants to earn from sales of its products or services. The formula for the calculation of price, when desired profit is given, is as follows:

Price per visit = (total cost incurred on service + desired profit) / total number of visits

The desired profit is $100,000. What price should you charge per visit to produce that amount of profit? Show your work please.

C. If the fixed costs are changed to $1,000,000 and the other costs are the same as in part A, what is the breakeven price per visit? Show your work please.

D. The desired profit is still $100,000, how much should you charge per visit to make that profit? Show your work please.

E. The variable cost changes to $10 per visit and the fixed cost is $1,000,000 and overhead allocation is $50,000 per annum. What is the breakeven cost now? Show your work please.

F. The desired profit is $100,000. How much should you charge per visit now? Show your work please.

Answer #1

Annual Visits = 20000, Variable cost = 5 per visit, Fixed cost 500000 , Overhead allocation = 50000

A) Calculation of Break Even price per visit

=

=

=

= 32.5

B) Price per visit for desired profit

=

=

= 37.5

C) Change in fixed cost. break even

= 57.5

D) Change in Fixed cost with desired 100000 profit.

=

= 62.5

E) Variable cost change to 10, FC 100000 and overhead 50000

= 62.

F) Variable cost 10, FC 1000000, overhead 50000 and profit 100000

= 67.5

Average gross revenue per visit = $110
Average bad debt % per visit = 20%
Variable costs per visit = $16
Fixed costs per annum:
Salaries - $575,000
Rent - $50,000
Other - $20,000
1. How many clinic visits are required for the operation to
breakeven? Show all calculation steps
2. How many visits are required for the clinic to earn a pre-tax
profit of $200,000

Triangle Pediatrics
currently provides 1,000 visits per year at a price of $50 per
visit. The variable cost per visit (variable cost rate) is $30, and
total fixed costs are $15,000.
What is the...
· contribution margin
for a volume of 1,000 units
A: $15,000
B: $45,000
C: $20,000
D:
$38,000
· profit for a volume
of 1,000 units?
A: $20,000
B: $15,000
C: $10,000
D: $5,000
· the volume required
to breakeven?
A: 650 visits
B: 750 visits
C: ...

Triangle Pediatrics currently provides 1,000 visits per
year at a price of $50 per visit. The variable cost per visit
(variable cost rate) is $30, and total fixed costs are $15,000. The
business manager suggests that Triangle Pediatrics can increase the
number of visits to 1,200 per year by cutting the price per visit
by $5 and increasing the fixed advertising budget by
$5,000.
A) Based on this scenario, what is the contribution
margin for a volume of 1,000 units?...

Total fixed costs = $1,000,000
Unit Price = $5,515
Unit Variable Cost = $2,170
Find the breakeven volume. What happens to the breakeven volume if
the unit price falls to $5,000 and unit variable cost rises to
$2,500? Discuss your findings and show all work!

A firm is able to sell 25,000 units
at $ 10 per piece. The company fixed cost is $50,000. Variable cost
is $5 per unit.
a. What is the contribution per
unit?
b.
What is the breakeven sales in $? What is the breakeven sale in
units?
c. What is the markup on sales
price? What is the mark up on total cost?
They raise the price to $15
and demand drops to 15000.
d. Calculate the price
elasticity.
e....

General Hospital is introducing a new service that anticipates
having 550 patient visits per year at an average cost per visit of
$2,250 and average billed charges per visit of $4,400.
Determine the amount of gross revenue, contractual deductions,
net patient revenue, total costs, and net operating income that
would result for both Medicare and Medicaid. Must show all work and
calculations.
Payor
Class Number
of pt visits Payment
/case Gross
Revenue Contractual
Deductions Net Pt
Revenue Total
Costs Net Operating Income
Medicare 350
$2,050
Medicaid 200
$1,650

Good Will General Hospital is introducing a new service that
anticipates to have 550 patient visits per year at an average cost
per visit of $2,200 and and average billed charges per visit of
$4,500.
Determine the gross revenue, contractual deductions, net patient
revenue, total costs and net operating income that would result
given the payer mix and terms in the table below.
Please show all of your work to receive credit. This question is
worth 10 points.
Payor
Class Number...

Multi-level Contribution Margin
Calculation: 7-Eleven target profit :
Fixed Cost per store $80,000 per
year
Variable cost ratio 80%
Average Sale per customer visit
$17.00
Average customer visits per week
1.5
Customers as portion of city
population 5%
At what city population can a single 7-Eleven earn a profit of
$40,000

Alternative Annual Fixed Cost
Annual Variable Cost per Unit
A
$50,000
$20
B
$100,000
$10
Vegas Herman In. is investigating implementing some new
production machinery as a part of its operations. Two alternatives
have been found, and they have the following fixed & variable
costs. What is the break-even point (which means break-even
output)?
a.
5,000.
b.
6,000.
c.
7,000.
d. 8,000.

Question 4:
Eric Co. uses machine hours to apply standard overhead cost to
production. The following data pertain to October:
Master budget data:
Units
2,500
Total machine hours (denominator volume)
100,000
Total variable overhead cost
$
250,000
Total fixed overhead cost
$
50,000
Actual operating results:
Variable overhead cost incurred
$
265,000
Fixed overhead cost incurred
$
54,000
Units manufactured
2,250
Total machine hours
96,000
Required: Compute the following variances using
machine hours as the activity variable used to assign...

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