10. Expand or reduce decision. Janet Gilbert is director of labs. She has some extra capacity and has contracted with some small neighboring hospitals to run some of their lab tests.She has recently had a study conducted and has determined that her cost for these contracts are $50,000, of which $7000 is the variable cost of supplies. The rest is nonavoidable fixed cost. She currently charges an average of $20 per test. She is thinking of lowering her price by 20% in hopes of raising her current volume of 10,000 tests by 15percent. If she does so, she expects her variable cost per test will go up by 4percent. Determine the current and predicted: revenues, variable costs, and total contribution margin and product margin. What do you recommend she do?Why?

Postyour response to the question you were assigned and explain your reasoning. Suggest how nurse managers could use the critical business indicator you selected to both meet the needs of a department or organization and remain within budget. Provide a specific example. Describe potential ramifications of making a financial decision without using business indicators. Specify strategies for addressing a situation where a break-even point is higher than expected revenues.