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Homework

Firefox Fle Edit View XmyMi, 1 Marsh A University × homeworkld-5 ACC 613 Profit Planning &Control (Online 2(1) Homework: Chapter 3 Homework Score: 0.82 of 3 pts Gary Spurlock 2/5/19 10:26 HW Score: 36.61%, 12.82 of 36 E3-27 (similar to) Question Help Maloy Medical Insilutle operates a 300-bed hosptal and offers a mumber of specialized medical sevis hospital facilty and equioment are leased on a long em basis The hospital charges $3,000 por palient dey On the Malay'sRequirements (a) How much will trve hesoital reed to charge per patient day to break even at this leve of activity? h Refr to the oniginal dats is the pobiem ow many patient days must Matlby everage each month te sam a terget basis of past cost data, Malloy has estimaled its vanable coste 9600 per patient dey Faed costs are $2.500,000 par month. The hospita's administrator has esmated thait the soital wil seerage 5,000 petent days par prot of $51.200 per moren? break een at ths level of vity Requirement (a.) How much wil the hospital need to charge per patient day to Frst detemine the basie Cost-Volume Proft (CVP) equation Proft then enck Check Anwer. Choose bom any deo-down int

Answer 1

(a)

How much will the hospital need to charge per patient day to breakeven at this level of activity?

Answer:

First determine the basic cost- volume-Profit (CVP) Equation

First determine basic cost- volume-Profit (CVP) Equation

Total Revenue

-

Total Variable cost

-

Fixed cost

=

Profit

At break even point profit equal to Zero(0)

hospital need to charge per patient day to breakeven at this level of activity

=

Total Revenue	-	Total Variable cost	-	Fixed cost	=	Profit
(5000*x)	-	(5000*400)	-	2,500,000	=	0

x=900

Or we can solve in other way as under

0 = (Units Sold * Revenue per Unit) – (Units Sold * Variable Cost per Unit) – Fixed Costs

0=(5000*x)-(5000*400)-(2,500,000)

0=(5000*x)-2,000,000-2,500,000

4,500,000/5000=x

x=900

hospital need to charge per patient day to breakeven at this level of activity=900

___________________________________________________________________

(b)

Refer to the original data in the problem. How many patient days must Morton average each month to earn a target profit of $51,200 per month?,

$51,200 = [Units Sold * (Revenue per Unit – Variable Cost per Unit)] – Fixed Costs

$51,200 = x * ($3,000 - $4,00) - $2,500,000

x=962