Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Break even problems and solutions. I need the solutions for those questions in the word documents. All documents. Assignment 3 - Break-even Problems Dr. Jones

Break even problems and solutions. I need the solutions for those questions in the word documents. All documents.

image text in transcribed Assignment 3 - Break-even Problems Dr. Jones is deciding on whether to open a Surgery Center. He estimates that the annual Fixed Overhead costs for the center will be $100,000. He also estimates that he will have $75,000 in fixed staffing costs. Dr. Jones' accountant has told him that his variable costs will be $250 per surgical case in staffing costs, plus an additional $75 per case in medical supplies. In studying the fee schedules of Medicare and Blue Cross, Dr. Jones feels that he will earn approximately $750 per case based on both the payer mix and types of procedures he will be performing. What is Dr. Jones' incremental profit per case? Based on the information given, what volume of cases does Dr. Jones need to have in order to break-even? Dr. Smith is deciding on whether to open a new clinic. He estimates that the annual Fixed Overhead costs for the center will be $200,000. He also estimates that he will have $100,000 is fixed staffing costs. Dr. Smith's office manager has told him that his variable costs will be $15 per patient in staffing costs, plus an additional $5 per case in medical supplies. In studying the fee schedules of Medicare and Blue Cross, Dr. Smith feels that he will earn approximately $100 per case based on both the payer mix and types of patient visits he will be seeing. What is Dr. Smith's incremental profit per case? Based on the information given, what volume of cases does Dr. Smith need to have in order to break-even? Dr. Smith's office manager has told him he will need to clear an additional $150,000 of cash flow (above break-even) in order to pay the debt service on the cost of the equipment and yield the required return on the investment. What volume of cases does Dr. Smith need to do to meet this target? What is the average cost per case at this volume? Dr. Smith's accountant has told him he will need to clear an additional $200,000 of cash flow (above break-even) in order to pay the debt service on the cost of the equipment and yield the required return on the investment. What volume of cases does Dr. Smith need to do to meet this target? What is the average cost per case at this volume? Assignment 4 - Cost Allocation Case You are helping the Finance director of a special project. He is attempting to determine the best method to allocate the Housekeeping department. He has narrowed his choices to two key statistics: 1 - Square Feet or 2 - Hours Spent in Each Clinical Area. Below is the pertinent data you will need to perform the allocation. Housekeeping Department Total Costs: $250,000 Total Square Feet: Total Hours Spent: 125,000 12,000 What is the allocation Rate for: Using Square Feet: Using Hours: Allocate to the following Departments based on the provided statistics: Medical Unit Cath Lab Surgery Department Radiology Lab Sq Ft Hours 20,000 15,000 50,000 35,000 5,000 2,000 2,000 4,000 3,000 1,000 Based on your analysis, are there differences? Which method would you choose and why? (Please give a thoughtful answer). Assignment 5 - Pricing Problems Dr. Jones is deciding on whether to open a Surgery Center. He estimates that the annual Fixed Overhead costs for the center will be $120,000. He also estimates that he will have $75,000 is fixed staffing costs. Dr. Jones' accountant has told him that his variable costs will be $250 per surgical case in staffing costs, plus an additional $75 per case in medical supplies. In studying the demand for the procedures, Dr. Jones feels that he will perform approximately 100 surgeries per year. What must he collect per surgical case per procedure to break even? In order to make a 100,000 profit, what must Dr. Jones collect per case? Assuming a volume of 200 surgeries, what must Dr. Jones collect per case to break-even

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Management For Decision Makers

Authors: Peter Atrill

7th Edition

129201606X, 978-1292016061

More Books

Students also viewed these Finance questions

Question

1. Dont say, This is easy, I know you can do it.

Answered: 1 week ago

Question

Get married, do not wait for me

Answered: 1 week ago

Question

Do not pay him, wait until I come

Answered: 1 week ago

Question

Do not get married, wait until I come, etc.

Answered: 1 week ago