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Assume that a radiologist group practice has the following cost structure: Fixed costs $500,000 Variable cost per procedure 25 Charge (revenue) per procedure 100 Furthermore,
Assume that a radiologist group practice has the following cost structure: | ||||||
Fixed costs | $500,000 | |||||
Variable cost per procedure | 25 | |||||
Charge (revenue) per procedure | 100 | |||||
Furthermore, assume that the group expects to perform 7,500 proce- | ||||||
dures in the coming year. | ||||||
a. Construct the groups base case projected P&L statement. | ||||||
b. part 1 - What is the groups contribution margin? b. - part 2 - What is its breakeven point? | ||||||
c. part 1 - What volume is required to provide a pretax profit of $100,000? | ||||||
c - part 2 - A pretax profit of $200,000? |
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