Scenario Analysis #3 MultiCare operates a general hospital but rents space to separately owned entities rendering specialized services such as pediatrics and MultiCare oncology. Multicare charges each separate entity for patients' services (meals and laundry) and for administrative services (billings and collections). Space and bed rentals are fixed charges for the year, based on bed capacity rented to each entity. MultiCare charged the following costs to Pediatrics for the year ended June 30, 2021: Bed Capacity (Fixed) $70,000 Patient Services (Variable) Dietary $600,000 Janitorial Laundry 300,000 Laboratory 450,000 Pharmacy 350,000 Repairs and Maintenance General and Administrative Rent Billings and Collections 300,000 Total $2,000,000 In addition to these charges from MultiCare, Pediatrics incurred the following personnel costs: 30,000 1,800,000 1,200,000 $3,100,000 Annual Salaries Supervising Nurses Nurses Assistants Total $100,000 200,000 130,000 $430,000 *These salaries are fixed within the ranges of annual patient-days considered in this problem. During the year ended June 30, 2021, Pediatrics charged each patient $300 per day, had a capacity of 60 beds, and had revenues of $6,000,000 for 365 days. Pediatrics operated at 100 percent capacity on 86 days during this period. It is estimated that during these 86 days, the demand exceeded 80 beds. Multicare has 20 additional beds available for rent for the year ending June 30, 2022. This additional rental would proportionately increase Pediatrics' annual fixed charges based on bed capacity. Your Task: a. Calculate the minimum number of patient-days required for Pediatrics to break even for the year ending June 30, 2022, if the additional beds are not rented. Patient demand is unknown, but assume that revenue per patient-day, cost per patient-day, cost per bed, and salary rates for the year ending June 30, 2022, remain the same as for the year ended June 30, 2021. b. Assume Pediatrics rents the extra 20-bed capacity from MultiCare. Determine the net increase or decrease in earnings by preparing a schedule of increases in revenues and costs for the year ending June 30, 2022. Assume that patient demand, revenue per patient-day, cost per patient-day, cost per bed, and salary rates remain the same as for the year ended June 30, 2021. After thoughtfully considering the above financial analysis and legal, moral, & ethical concepts,' should Pediatrics rent the extra beds