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We have the company total revenue =$100*65000 =$6,500,000(A)
Total variable cost=$30*65000 =$1,950,000(B)
Total contribution margin=>(100-30)*65000 =$4,550,000(D)
Fixed cost+profit=Unit sold(Unit sales price-Unit variable cost)
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1d.The P&L statement can be expressed as the equation:
Total revenues – Total variable costs – Fixed costs = Profit
(Unit charge x Volume) – (Unit variable cost x Volume) – Fixed costs = Profit
Using the information from the above P&L statement, what is the break-even point in volume?(Hint: no profit at break-even.)
point in dollar indicates the revenue level one has to reach to break-even,
which is equal to the revenue gained if the break-even point in volume is
achieved. Based on the previous question, what is the break-even point in
dollar? (Relationship of Costs to Volume and Revenue Chapter 6 of
1f. Check out Table 5.8from Gapenski’s book for another P&L Statement. Why does it have additional lines of revenues compared with the one for Good Health Clinic?
1g.Compare the P&L statement atTable 5.10 with the one for Good Health Clinic. What is the difference in estimating revenue? Based on Table 5.10, can the clinic receive more revenues by providing more clinic visits?
2. Cost allocation and determination: Chapter 6 of Nowicki’s book
two departments/units in a healthcare organization that can be considered as
revenue centers. List two departments/units that can only be cost centers but
not revenue centers.
2b.Define two of cost allocation methods and List at least one advantage and one disadvantage for each.
2c.What is "cost driver"? A manager in a hospital needs to allocate housekeeping costs to other departments. Can you suggest a cost driver and provide your reason?
3. Setting Charges: Chapter 7 of Nowicki’s book: Explain the following methods of setting charges: RVU method, hourly rate method, and surcharge method. For EACH method, provide one department in a healthcare organization as an example that would use this method.
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