Q1. St. Vincent hospital has overall variable costs of 30% of total revenue and fixed cost of $42 million per year.

-Compute the break even point expressed in total revenues.

-A patient day is often used to measure the volume of hospital. Suppose there are going to be 50,000 patient days next year. Compute the average daily revenue per patient necessary to breakeven.

Q2. The holiday hotel has annual fixed costs applicable to its rooms of 3.2 million for its 400 room motel, average daily room rents of $50 and average variable costs of $10 for each room rented. It operates 365 days per year

-How much net income on rooms will be generated 1: if the motel is completely full throughout the entire year and 2: if the motel is half full?

-Compute the break even point expressed in total revenues, the breakeven point in number of rooms rented. what percentage occupancy for the year is needed to breakeven?

Q3. A California law permits bingo games when offered by specified non profit institutions including churches. Reverend Jill Bono, the pastor of a new parish in Marin County, is investigating the desirability of conducting weekly bingo nights. The parish has no hall, but a local hotel would be willing to commit its hall for a lump sum rental of $600per night. The rent would include cleaning, setting up and taking down the tables and chairs and so on.

1.Bingo carts would be provided by the local printer in return for free advertising thereon. Door prizes would be donated by local merchants. The services of clerks, callers, security force and others would be donated by volunteers. Admission would be $3 per person entitling the player to one card extra cards would be $1.50 each. Reverend Bono also learns that many person buy extra cards, so there would be an average of four cards played per person. What is the maximum in total cash prizes that the church may award and still breakeven if 200 persons attend each weekly session?

2.Suppose the total cash prizes are $800. What will be the churches operating income the effects of the cost behaviour on income.

3.After operating for 10 months, reverend Bono is thinking of negotiating a different rental arrangement but keeping the prize money unchanged at $900. Suppose the rent is $200 weekly plus $2 per person. Compute the operating income for attendance of 100, 200 and 300 persons, respectively. Explain why the results differ from those in requirement 2.

Q4 Andy's ale house, a pub located near state university, serves as a gathering place for the university's more social scholars. Andy sells beer on draft and all brands of bottled beer at a contribution margin of $.60 a beer

Andy is considering also selling hamburgers during selected hours. His reasons are twofold. First, sandwiches would attract daytime customers. A hamburger and a beer which provide more extensive menus. Andy analyzed the cost as follows (please see attachment Q4):

Andy Planned a selling price of $1.10 per hamburger to lure many customers. For questions assume a 30 day month.

1.What are the monthly and daily breakeven points, in number of hamburger?

2.What are the monthly and daily breakeven points, in dollar sales?

3.At the end of two months, Andy finds he has sold 3600 hamburgers. What is the operating profit per month on hamburger?

4.Andy thinks that at least 60 extra beers are sold per day because he has these hamburgers available. This means that 60 extra people come to the bar or that 60 buy an extra beer because they are attracted by the hamburgers. How does this affect Andy's monthly operating income?

5.Refer to requirement 3 how many extra beers would have to be sold per day so that the overall effects of the hamburger sales on monthly sales on monthly operating income would be zero?

Q5. A Huang is a traveling inspector for the state auditor's office. He uses his own car and the agency reimburses him at $.23 per mile. A Huang claims he needs $.27 per mile just to breakeven (Please see Q5 attachment)

Q6. is currently an attachment

Per Month Monthly fixed expenses Wages of part-time cook $1,200 Other 360 Total $1,560 Per Hamburger Variable expenses Rolls $.12 Meat @ $2.80 per pound (7 hamburgers per pound) 40 Other .18 Total $.70Shawn McHale, the district manager, looks into the matter and compiles the follow- ing information about Huang's expenses: Oil change every 3,000 miles $ 30 Maintenance (other than oil) every 6,000 miles 240 Yearly insurance 700 Auto cost $13,500 with an average cash trade-in value of $6,000; has a useful life of three years. Gasoline is approximately $1.70 per gallon and Huang averages 17 miles per gallon. When Huang is on the road, he averages 120 miles a day. McHale knows that Huang does not work Saturdays or Sundays, has 10 working days vacation and 6 holidays, and spends approximately 15 working days in the office. 1. How many miles per year would Huang have to travel to break even at the current rate of reimbursement? 2. What would be an equitable mileage rate?2-40 Government Organization A social welfare agency has a government budget appropriation for 19X6 of $900,000. The agency's major mission is to help handicapped persons who are unable to hold jobs. On the average, the agency supplements each person's other income by $5,000 annually. The agency's fixed costs are $290,000. There are no other costs. 1. How many handicapped persons are helped during 19X6? 2. For 19X7, the agency's budget appropriation has been reduced by 15%. If the agency continues the same level of monetary support per person, how many handicapped persons will be helped in 19X7? Compute the percentage decline in the number of persons helped. 3. Assume a budget reduction of 15%, as in requirement 2. The manager of the agency has discretion as to how much to supplement each handicapped person's income. She does not want to reduce the number of persons served. On the average, what is the amount of the supplement that can be given to each person? Compute the per- centage decline in the annual supplement