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Question 1. Dynamic Physical. Dynamic Physical (DP) has the same value proposition and business model as XtremePhysical in our earlier homework. Its process is
Question 1. Dynamic Physical. Dynamic Physical (DP) has the same value proposition and business model as XtremePhysical in our earlier homework. Its process is also similar to XtremePhysical's, though some of its details and operational characteristics vary slightly. Currently DP is only seeing 25 clients per day. However, they could see more customers without needing to add resources. Dynamic Physical's employees are all salaried, making them essentially a fixed cost. That and their other fixed costs amortized over their 25 patients per day is $95 per patient. Their revenue per patient and cost of test materials per patient are the same as XtremePhysical's at $200 and $20 per client a. What is Dynamic Physical's operating leverage? I b. If Dynamic Physical can somehow increase their sales by 5% through a marketing campaign, what will be their percentage increase in profit? (Hint: use the operating leverage from the prior problem.) c. How many clients does Dynamic Physical have to see each day to break even? Round up if needed.
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a Dynamic Physicals Operating Leverage Operating leverage measures the extent to which a companys fixed costs contribute to its overall cost structure ...Get Instant Access to Expert-Tailored Solutions
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