Appolo Healthcare Solutions provides preventive health check-up packages for men and women over 40 years of age
Question:
Appolo Healthcare Solutions provides preventive health check-up packages for men and women over 40 years of age and charges \($12\),000 per package on an average. The average variable costs per package are as follows:
Annual fixed costs total \($900\),000.
1. Calculate the number of health check-up packages that must be sold to break even.
2. Calculate the revenue needed to earn a target operating income of \($270\),000.
3. If fixed costs increase by \($25\),000, what decrease in variable cost per person must be achieved to maintain the breakeven point calculated in requirement 1?
4. The managing director at Appolo proposes to increase the average price of the packages by \($900\) to decrease the breakeven point in units. Using information in the original problem, calculate the new breakeven point in units. What factors should the managing director consider before deciding to increase the price of the package?
Step by Step Answer:
Horngrens Cost Accounting A Managerial Emphasis
ISBN: 9781292211541
16th Global Edition
Authors: Srikant Datar, Madhav Rajan