Your nursing home defines output as a patient day. Its present volume is 26,000 patient days. The average cost per day is $90. Present revenues and costs are presented below:

If volume goes up 10% to 28,600 patient days and payer mix is unchanged, what will the net income be? What is the break-even in patient days for this nursing home, assuming no profit is required? If volume goes up 10% to 28,600 patient days and payer mix is unchanged, what will the net income be?

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$750,000 $1.800.000 $2,550,000 Revenues: Charge patients (6,000 patient days) Fixed-price patients (20,000 patient days) Total net revenues Costs: Fixed costs Variable costs ($45/PD) Total ($90/PD) Net income $1,170,000 $1,170,000 $2,340.000 $210,000