Murillo medical institute operates a 100 bed hospital and offers a number of specialized medical services. Murillo’s hospital facility and equipment are leased on a long-term basis. The hospital charges $ 100 per patient day. On the basis of past cost data, Murillo has estimated its variable cost as $ 45.70 per patient day. Fixed costs are $ 91,000 per month. The hospital administrator’s has estimated that the hospital will average 2,300 patient days per month.

a. How much will the hospital need to charge per patient day to break even at this level of activity?

b. Refer to original data in the problem. How many patients’ days must Murillo average each month to earn a target profit of $ 45,000 per month?