Givens: Reimbersement per screen $66.05 Equipment costs per month $1450.00 Techn
ID: 2667110 • Letter: G
Question
Givens:Reimbersement per screen $66.05
Equipment costs per month $1450.00
Technologist cost per mammography $15.60
Technologist aide per mammography $3.10
Varialbe cost per mammography $15.00
Equipment maintenance per month per machine $916.66
1. What is the monthly patient volume needed per month to cover fixed and variable costs?
2. What is the patient volume needed per month if imaging center desores tp cover its fixed & variable costs and make a $5000 profit on this equipment to cover other costs associated with the organization.
3. If reimbursement decreases to $60 per screen, what is the patient volume needed per month to cover fixed & variable costs but not for profit?
4. If a new technologist aide is hired, what is the patient volume needed per month at the orginal reimbursement rate to variable costs, but not profit?
Please show me your work in solving this.
Explanation / Answer
(1) Monthly Patient volume needed per month to cover fixed and variable costs?
Break-even volume = Fixed Costs / Contribution per unit
Total Variable Costs:
Technologist cost per mammography $15.60
Technologist aide per mammography $3.10
Variable Cost per mammography $15.00
Total Variable Cost per Screen = $15.60 + $3.10 + $15.00
Total Variable Cost per Screen = $33.70
Contribution per Screen = [$66.05 - $33.70]
Contribution per Screen = $32.35
Fixed Costs:
Equipment Costs per month $1,450
Equipment maintenance per month per machine = $916.66
Total Fixed Costs per month = [$1,450 + $916.66]
Total Fixed Costs month = $2,366.66
Monthly Patient volume needed per month to cover fixed and variable costs =
[$2,366.66 / $32.35]
= 73.15
(2) What is the patient volume needed per month if imaging center desores tp cover its fixed & variable costs and make a $5,000 profit on this equipment to cover other costs associated with the organization?
Break-even volume = [(Fixed expenses + Desired profit) / Unit Contribution Margin]
Total Variable Costs:
Technologist cost per mammography $15.60
Technologist aide per mammography $3.10
Variable Cost per mammography $15.00
Total Variable Cost per Screen = $15.60 + $3.10 + $15.00
Total Variable Cost per Screen = $33.70
Contribution per Screen = [$66.05 - $33.70]
Contribution per Screen = $32.35
Fixed Costs:
Equipment Costs per month $1,450
Equipment maintenance per month per machine = $916.66
Total Fixed Costs per month = [$1,450 + $916.66]
Total Fixed Costs month = $2,366.66
Break-even Volume = [($2,366.66 + $5,000) / $32.35]
= $7,366.66 / $32.35
= 227
(3) If reimbursement decreases to $60 per screen, what is the patient volume needed per month to cover fixed & variable costs but not for profit?
Break-even volume = Fixed Costs / Contribution per unit
Total Variable Cost per Screen = $33.70
Contribution per Screen = [$60.00 - $33.70]
Contribution per Screen = $26.30
Fixed Costs:
Equipment Costs per month $1,450
Equipment maintenance per month per machine = $916.66
Total Fixed Costs per month = [$1,450 + $916.66]
Total Fixed Costs month = $2,366.66
The patient volume needed per month to cover fixed & variable costs but not for profit =
[$2,366.66 / $26.30]
= 89.98
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