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From the following data, determine the amount of revenue that Gulf Coast Regional Hospital needs to be generated to meet the hospitals financial requirements: Revenue

From the following data, determine the amount of revenue that Gulf Coast Regional Hospitalneeds to be generated to meet the hospitals financial requirements:

Revenue to Meet Hospital Financial Requirements

Volume

Medicare cases 800

Cost-paying cases 675

Charity care and bad-debt cases 200

Charge-paying cases 450

Total cases 2,125

Financial data

Budgeted expenses $ 5,000,000

Debt principal payment 300,000

Working capital increase 225,000

Capital expenditures 550,000

Present payment structure

Medicare pays only $2,000 per case.

All other cost payers pay their share of existing expense

Equation to use:

Revenue =

Budgeted expense + Desired net income Noncharge-paying payments

Proportion of charge-paying patients

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