Dr. Linda Piro is considering opening a chiropractic clinic. Dr. Piro will see patients and her...
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Dr. Linda Piro is considering opening a chiropractic clinic. Dr. Piro will see patients and her husband Lars will run clinic operations. The clinic will be open 4 days per week. Lars found a clinic space for lease. The clinic has seven exam rooms, each of which can accommodate five patients in the morning and five patients in the afternoon. The clinic will be open 48 weeks per year. Lars drew up the following estimates: Average revenue per patient Average variable cost per patient Monthly staff salaries Monthly rent (premises and equipment) Monthly cleaning and maintenance Monthly supplies Monthly utilities and other expenses 50 20 7,000 3,200 800 300 3,000 Compute the annual break-even number of patient visits and sales revenue for the practice using a contribution margin financial statement Sales Variable cost Contribution margin Fixed cost Net income Sales Variable cost Contribution margin Fixed cost Net income Sales Variable cost CM% Contribution margin Fixed cost Net income Compute the number of patient visits and the amount of annual sales revenue needed to earn operating income of $150,000 for the first year. Hint, complete the contribution margin financial statement, where net income equals $150,000. Total annual patient volume based on clinic space CM% Patient volume based on break even Patient volume based on $150k profit Total sales to achieve $150k profit Dr. Linda Piro is considering opening a chiropractic clinic. Dr. Piro will see patients and her husband Lars will run clinic operations. The clinic will be open 4 days per week. Lars found a clinic space for lease. The clinic has seven exam rooms, each of which can accommodate five patients in the morning and five patients in the afternoon. The clinic will be open 48 weeks per year. Lars drew up the following estimates: Average revenue per patient Average variable cost per patient Monthly staff salaries Monthly rent (premises and equipment) Monthly cleaning and maintenance Monthly supplies Monthly utilities and other expenses 50 20 7,000 3,200 800 300 3,000 Compute the annual break-even number of patient visits and sales revenue for the practice using a contribution margin financial statement Sales Variable cost Contribution margin Fixed cost Net income Sales Variable cost Contribution margin Fixed cost Net income Sales Variable cost CM% Contribution margin Fixed cost Net income Compute the number of patient visits and the amount of annual sales revenue needed to earn operating income of $150,000 for the first year. Hint, complete the contribution margin financial statement, where net income equals $150,000. Total annual patient volume based on clinic space CM% Patient volume based on break even Patient volume based on $150k profit Total sales to achieve $150k profit
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To calculate the breakeven point and the number of patient visits and annual sales revenue needed to earn an operating income of 150000 we need to use ... View the full answer
Related Book For
Managerial accounting
ISBN: 978-0471467854
1st edition
Authors: ramji balakrishnan, k. s i varamakrishnan, Geoffrey b. sprin
Posted Date:
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