Question
Medical Institute operates a 300-bed hospital and offers a number of specialized medical services. Maki's hospital facility and equipment are leased on a long-term basis.
Medical Institute operates a 300-bed hospital and offers a number of specialized medical services.
Maki's hospital facility and equipment are leased on a long-term basis. The hospital charges $2,400 per patient day. On the basis of past cost data, Maki has estimated its variable costs as $600 per patient day. Fixed costs are $5,400,000 per month. The hospital's administrator has estimated that the hospital will average 4,500
patient days per month.
Part 1
Requirements
(a) | How much will the hospital need to charge per patient day to break even at this level of activity? |
(b) | Refer to the original data in the problem. How many patient days must Maki average each month to earn a target profit of $45,000 per month? |
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