I need help with an accounting problem

Tutor: None Selected Time limit: 1 Day

based on 65,000 patient visits:

Total revenue ($100 x 65,000)                            $       (A)              

Total variable costs ($30 x 65,000)                            (B)            
   Total contribution margin ($     (C)   x 65,000)  $       (D)            
Fixed costs                                                              4,000,000
Profit                                                                 $        (E)           

Nov 4th, 2015

Thank you for the opportunity to help you with your question!

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)


Profit :-


Fixed cost+profit=Unit sold(Unit sales price-Unit variable cost)

 Profit +4000000=65000(100-30)




Please rate my answer so that I can help you further in the future.
Nov 4th, 2015

Thank you so much. can you please help me with this last 2 parts...? i have given you some of the best rating and comments.*****

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.)

1e.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 Nowicki’s book)
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

2a.List 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. 

Nov 4th, 2015


Thanks so much.I would like to answer but please post these question one by one as it would be difficult to answer at a time.

Nov 4th, 2015

Nov 4th, 2015
Nov 4th, 2015
Oct 24th, 2016
Mark as Final Answer
Unmark as Final Answer
Final Answer

Secure Information

Content will be erased after question is completed.

Final Answer