5.3 Assume that a radiologist group practice has the following cost structure:

Fixed Cost $500,000

Variable Cost per Procedure $25

Charge (revenue) per procedure $100

Furthermore, assume that the group expects to perform 7,500 procedures in the coming year.

A. Construct the groups base case projected P & L statement.

B. What is the groups contribution margin? What is its breakeven point?

C. What volume is required to provide a pretax profit of $100,000?

D. Sketch out a CVP analysis graph depicting the base case situation.

E. Now assume that the practice contracts with one HMO, and the plan purpose a 20 percent discount from charges. Redo questions a, b, c, and d under those conditions.

********PLEASE show the STEP BY STEP way you got the answer so I can understand how to do it. Thank You (: