El Paso

Hospital has overall variable costs of

24%

of total revenue and fixed costs of

$38

million per year.

Requirements

1.	Compute the break-even point expressed in total revenue.
2.	A patient-day is often used to measure the volume of a hospital. Suppose there are to be 50,000 patient-days next year. Compute the average daily revenue per patient-day necessary to achieve the break-even total revenue computed in item 1.