Case 1 Break-Even Analysis; Hospital CVP Relationships Delaware Medical Center operates a general hospital. The medical center also rents space and beds to separately owned entities rendering specialized services, such as Pediatrics and Psychiatric Care. Delaware charges each separate entity for common services, such as patients' meals and laundry, and for administrative services, such as billings and collections. Space and bed rentals are fixed charges for the year, based on bed capacity rented to each entity. Delaware Medical Center charged the following costs to Pediatrics for the year ended June 30, 20x1: Patient Days (variable) Bed Capacity (fixed) Dietary 600,000 Janitorial $ 70,000 Laundry 300,000 Laboratory 450,000 Pharmacy 350,000 Repairs and maintenance 30,000 General and 1,300,000 administrative Rent 1,500,000 Billings and collections Total 300,000 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. During the year ended June 30, 20x2, Pediatrics had 60 rented beds. Assume that one year is 365 days throughout the case. Therefore, Pediatrics' maximum capacity (capacity of fully utilizing all beds 100%) was 21,900 patient days (365 days*60 beds). However, in this year, the department had 18,500 patient days. Delaware Medical Center has the following minimum departmental personnel requirements, based on total annual patient days: Annual Patient Days Aides Nurse S Supervising Nurses Up to 22,000 22,001 to 26,000 26,001 to 29,200 235 20 10 4 14 5 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. For the upcoming year ending June 30, 20x3, the Department will be able to obtain additional patient