Question

**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?**

**B) Based on this scenario, what is the profit for a
volume of 1,000 units?**

**C) Based on this scenario, what are the revenues for a
volume of 1,200 units?**

**D) Based on the base case scenario, what is the volume
required to breakeven?**

Answer #1

Req A: | ||||

Selling price | 45 | |||

Less: VC per visit | 30 | |||

CM per visit | 15 | |||

Multiply: Number of visits | 1000 | |||

Total contribution | 15000 | |||

Req B: | ||||

Total Contribution at 1000 visits | 15000 | |||

Less: Fixed cost | ||||

Current fixed cost | 15000 | |||

Advertisement cost | 5000 | |||

Total fixed cost | 20000 | |||

Net Loss | -5000 | |||

Req c: | ||||

Revenues at 1000 units: | ||||

Number ofvisits | 1000 | |||

Multiply: Revise selling price | 45 | |||

Total revenue | 45000 | |||

Req d: | ||||

Selling price | 50 | |||

Less: VC per visit | 30 | |||

CM per visit | 20 | |||

Break even visits: | ||||

Fixed cost | 15000 | |||

Divide: CM per unit | 20 | |||

Break even visits: | 750 | |||

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: ...

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Breakeven per visit price = total cost incurred on service /
total number of visits
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a.
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b.
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c.
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d.
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Fixed cost
Contribution margin
Selling price per unit
Variable cost per unit
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$88,400
$
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AAA Company
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Variable costs per unit
30
Total fixed costs
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Required:
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2- Calculate Contribution margin
ratio
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Sales
$
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Variable expenses
45,000
Contribution margin
30,000
Fixed expenses
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Net operating income
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Net operating income $3,780
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Baylor, Inc. just finished its second year of operations. In the
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