Delaware Medical Center operates a general hospital.

	Patient Days (variable)	Bed Capacity (Fixed)
Dietary	$600,000	$0
Janitorial	$0	$70,000
Laundry	$300,000	$0
Laboratory	$450,000	$0
Pharmacy	$350,000	$0
Repairs/Maintenance	$0	$30,000
General/Admin	$0	$1,300,000
Rent	$0	$1,500,000
Billings and collection	$300,000	$0
Total	$2,000,000	$2,900,000

During the year ended June 30, 20x1, Pediatrics charged each patient an average of $300 per day, had a capacity of 60 beds, and had revenue of $6 million for 365 days. In addition, Pediatrics directly employed personnel with the following annual salary costs per employee: supervising nurses, $25,000; nurses, $20,000; and aides, $9,000. Delaware Medical Center has the following minimum departmental personnel requirements, based on total annual patient days:

Annual Patient Days	Aids	Nurses	Supervising Nurses
Up to 22,000	20	10	4
20,001 to 26,000	25	14	5
26,001 to 29,200	31	16	5

Pediatrics always employs only the minimum number of required personnel. Salaries of supervising nurses, nurses, and aides are therefore fixed within ranges of annual patient days. Pediatrics operated at 100 percent capacity on 90 days during the year ended June 30, 20x1. Administrators estimate that on these 90 days, Pediatrics could have filled another 20 beds above capacity. Delaware Medical Center has an additional 20 beds available for rent for the year ending June 30, 20x2. Such additional rental would increase Pediatrics' fixed charges based on bed capacity. (In the following requirements, ignore income taxes.) Required: 1. Calculate the minimum number of patient days required for Pediatrics to break even for the year ending June 30, 20x2, if the additional 20 beds are not rented. Patient demand is unknown, but assume that revenue per patient day, cost per patient day, cost per bed, and salary rates will remain the same as for the year ended June 30, 20x1.

2. Assume that patient demand, revenue per patient day, cost per patient day, cost per bed, and salary rates for the year ending June 30, 20x2, remain the same as for the year ended June 30, 20x1. Prepare a schedule of Pediatrics' increase in revenue and increase in costs for the year ending June 30, 20x2. Determine the net increase or decrease in Pediatrics' earnings from the additional 20 beds if Pediatrics rents this extra capacity from Delaware Medical Center.