Question

A new physician clinic is opening and the following monthly assumptions were made:

The expense budget was constructed assuming that staff salaries and associated fringe benefits, supplies and freight were variable costs - costs that increase with each patient served.
Total variable costs are $425.000 or $529.27 of cost per patient assuming that 803 patients are seen each month in this new clinic.
The total monthly cost is $530,000. The fixed cost is determined by subtracting the total variable cost from the total cost.
Apply the break even analysis. The breakeven point shows how many patients must be seen at an estimated revenue per patient of $675.00 to yield a contribution margin per patient that will recover the fixed costs.
How many patients must be seen each month for this clinic to break even?

Answer 1

thanks