Charity Hospital, a not-for-profit, has a maximum capacity of 15,000 discharges per year. Variable patient service costs are $495 per discharge. Variable general and administrative costs are $5 per discharge. Fixed overhead costs are 4,000,000 per year. The current reimbursement rate is $1000 per discarge.

A. What is Charity's breakeven volume in number of discharges?

B. Assume Charity's total discharges for 2014 totaled 10,000. In late 2014, a specialty cardiac hospital opened near charity, so that discharges in 2015 will reach only 8,500. Management is planning to cut fixed costs so that the total for 2015 will be 1,000,000 less than in 2014. Management is also considering reducing variable staffing costs in order to earn a target profit that will be the same dollar amount as the profit earned in 2014. Charity has already had 4,000 dischargesin 2015 at a reimbursement rate of 1,000 per discharge with variable costs unchanged. What contribution margin per unit is needed on the remaining 4,500 discharges in order to reach the target profit?