Cost = 5,000,000
Cost Per Patient Day = $500
Patient Day =$750
What are the total costs for the organization?
Is the hospital making a profit or loss? What is the profit/ loss?
What is the total contribution margin at 34,000
What is the volume breakeven in patient days
using the cost information given?
Total variable costs for 34,000 patient days in 2013 (34,000 x $500) $17,000,000
Fixed costs 5,000,000
Total costs for the organization $22,000,000
Revenue in 2013 (34,000 x $750) $25,500,000
Less total costs 22,000,000
Less variable costs 17,000,000
Total Contribution margin at 34,000 patient days $8,500,000
Revenue per patient day $750
Less variable costs per patient day 500
Contribution margin per patient day $250
Breakeven volume in patient days = Fixed costs/Contribution margin per day
Break even in dollars = 20,000 x $750
Thank you for your help! This helps me understand
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