Table 3

Operating Expenses Salaries and Wages 9,500.00$ Employee Benefits 3,325.00$ Supply Expense - da Vinci 20,000.00$ Supply Expense - Other 5,000.00$ Lease Expense 62,000.00$ Maintenance Expense 14,000.00$ Depreciation Expense 1,500.00$ Allocated Hospital Expenses 10,000.00$ The salaries and wages related to da Vinci surgeries are the support personnel which include RNs, Medical Assistants, etc. during the procedure. Employee benefits are related to the support personnel of the da Vinci procedures. The supply expense other relates to expenses associated with the surgical procedures done by the da Vinci but are not directly for the da Vinci equipment itself (sponges, linens, etc.). The lease expense in the monthly lease for the da Vinci. Maintenance expense is the support agreement to maintain the da Vinci. Depreciation expenses are for other equipment located within the da Vinci surgery suite. Allocated Hospital Expenses are fixed overhead expenses that are incurred and would be absorbed by other departments if da Vinci surgeries did not occur.

For the purposes of the analysis, management has determined the following: Table 4

Average Cases Per Month 12 Average Revenue per case 6,500.00$

7. Calculate the contribution margin. Be sure to identify the variable versus the fixed expenses and the determination of variable vs fixed.

8. Based on the determination you made in the above question, discuss the break-even point in number of cases per month. What are the implications associated with this number?