A hospital is currently using an old X-Ray machine and there is a proposal to switch to a newer model. The variable cost per unit and total fixed cost associated with the current X-ray machine are $ 100 p.u. and $ 300,000 respectively. The variable cost per unit and total fixed cost associated with the new X-ray machine are $ 80 p.u. and $ 400,000 respectively. The revenue generated per patient visit is $ 150. At what utilization level should the company shift from the old machine to the new machine?      

Answer rating: 100% (QA)

To determine the utilization level at which the hospital should switch from the old Xray machine to ... View the full answer