Mondou Medical Institute operates a 300-bed hospital and offers a number of specialized medical services.

Mondou's hospital facility and equipment are leased on a long-term basis. The hospital charges $2,000 per patient day. On the basis of past cost data, Mondou has estimated its variable costs as $800 per patient day. Fixed costs are $5,400,000 per month. The hospital's administrator has estimated that the hospital will average 4,000 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 Mondou average each month to earn a target profit of $42,000 per month?

Question content area bottom

Part 1

Requirement (a.) How much will the hospital need to charge per patient day to break even at this level of activity?

First determine the basic Cost-Volume-Profit (CVP) equation.

-

-

=

Profit

Part 2

Now rearrange the basic CVP equation to solve for the amount the hospital will need to charge per patient day to break even at the current level of activity. (Round your answer to the nearest dollar.)

The hospital will need to charge $enter your response here per patient day to break even at the current level of activity.

Part 3

Requirement (b.) Refer to the original data in the problem. How many patient days must Mondou average each month to earn a target profit of $42,000 per month?

Enter the formula and calculate how many patient days must Mondou average each month to earn a target profit of $42,000

per month. (Round the required unit sales to the nearest whole number.)

(		+		) /		=	Req. units (days)
(		+		) /		=