Answered step by step
Verified Expert Solution
Link Copied!

Question

...
1 Approved Answer

General Hospital, a not-for-profit acute care facility, has the following cost structure for its inpatient services:Fixed costs $10,000,000Variable cost per inpatient days $200 Charge (revenue)

General Hospital, a not-for-profit acute care facility, has the following cost structure for its inpatient services:Fixed costs $10,000,000Variable cost per inpatient days $200 Charge (revenue) per inpatient day $1,000 The hospital expects to have a patient load of 15,000 inpatient days next year.a. Construct the hospitals base case projected P&L statement.b. What is the hospitals breakeven point?c. What volume is required to provide a profit of $1,000,000? A profit of $500,000?d. Now assume that 20 percent of the hospitals inpatient days come from a managed care plan that wants a 25 percent discount from charges. Should the hospital agree to the discount proposal?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Auditing Cases An Active Learning Approach

Authors: Mark S. Beasley, Frank A. Buckless, Steven M. Glover, Douglas F. Prawitt

2nd Edition

9781266566899

Students also viewed these Accounting questions