Please provide a detailed answer to the attached question showing all workings. Thank you.
Please provide a detailed answer to the attached question showing all workings. Thank you.
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Module 3 Discussion Board
Break-even Problem–Discussion Board–Module 3
Payor
Insured
50.0%
90.0%
Self Pay
50.0%
50.0%
Total
100.0%
$250.00
$100.00
Fixed Costs
$200,000.00
Capacity
2,400
Tests
Fixed Cost/
–
=
$200,000.00
($175
–
$100)
What is the break-even point? Should this opportunity be pursued?
=
Tests
**Decision?
Type answer here.
Share
(Percent)
Collection Rate
(Percent)
Aggregate
Rate
A subordinate has come forward with a business venture concept that takes
advantage of a piece of equipment currently performing below its capability.
Here are the details:
1)
This equipment has the ability to produce a total of 200 tests a
month.
2)
This new business would have fixed costs of $200,000 per year for
salaries.
3)
Each test performed would consume $100 of supplies.
Gross Revenue
per Unit
4)
The price charged would be $250 per test.
Net Revenue
per Unit
5)
The business office has indicated that the collection rate is
a.
90% for insured patients
Variable Cost
per Unit
b.
50% for self-paying patients
6)
The expected mix of patients is
a.
50% insured
b.
50% self-pay
Break-even
Point
Net Revenue
per Unit
Variable Cost
per Unit
been set up. Use Excel to calculate the Aggregate Rate, Net Revenue per Unit,
and the Break-even Point. Post your decision and rationale to the Discussion
Board.
