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:

image text in transcribed

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?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  answer-question

Horngrens Cost Accounting A Managerial Emphasis

ISBN: 9781292211541

16th Global Edition

Authors: Srikant Datar, Madhav Rajan

Question Posted: