Dr. Linda Piro is considering opening a chiropractic clinic. Dr. Piro will see patients and her...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Dr. Linda Piro is considering opening a chiropractic clinic. Dr. Piro will see patients and her husband Lars will run clinic operations. The clinic will be open 4 days per week. Lars found a clinic space for lease. The clinic has seven exam rooms, each of which can accommodate five patients in the morning and five patients in the afternoon. The clinic will be open 48 weeks per year. Lars drew up the following estimates: Average revenue per patient Average variable cost per patient Monthly staff salaries Monthly rent (premises and equipment) Monthly cleaning and maintenance Monthly supplies Monthly utilities and other expenses 50 20 7,000 3,200 800 300 3,000 Compute the annual break-even number of patient visits and sales revenue for the practice using a contribution margin financial statement Sales Variable cost Contribution margin Fixed cost Net income Sales Variable cost Contribution margin Fixed cost Net income Sales Variable cost CM% Contribution margin Fixed cost Net income Compute the number of patient visits and the amount of annual sales revenue needed to earn operating income of $150,000 for the first year. Hint, complete the contribution margin financial statement, where net income equals $150,000. Total annual patient volume based on clinic space CM% Patient volume based on break even Patient volume based on $150k profit Total sales to achieve $150k profit Dr. Linda Piro is considering opening a chiropractic clinic. Dr. Piro will see patients and her husband Lars will run clinic operations. The clinic will be open 4 days per week. Lars found a clinic space for lease. The clinic has seven exam rooms, each of which can accommodate five patients in the morning and five patients in the afternoon. The clinic will be open 48 weeks per year. Lars drew up the following estimates: Average revenue per patient Average variable cost per patient Monthly staff salaries Monthly rent (premises and equipment) Monthly cleaning and maintenance Monthly supplies Monthly utilities and other expenses 50 20 7,000 3,200 800 300 3,000 Compute the annual break-even number of patient visits and sales revenue for the practice using a contribution margin financial statement Sales Variable cost Contribution margin Fixed cost Net income Sales Variable cost Contribution margin Fixed cost Net income Sales Variable cost CM% Contribution margin Fixed cost Net income Compute the number of patient visits and the amount of annual sales revenue needed to earn operating income of $150,000 for the first year. Hint, complete the contribution margin financial statement, where net income equals $150,000. Total annual patient volume based on clinic space CM% Patient volume based on break even Patient volume based on $150k profit Total sales to achieve $150k profit
Expert Answer:
Answer rating: 100% (QA)
To calculate the breakeven point and the number of patient visits and annual sales revenue needed to earn an operating income of 150000 we need to use ... View the full answer
Related Book For
Managerial accounting
ISBN: 978-0471467854
1st edition
Authors: ramji balakrishnan, k. s i varamakrishnan, Geoffrey b. sprin
Posted Date:
Students also viewed these corporate finance questions
-
Reflect on your own experiences working in a group, and set personal goals for the group project. What kinds of roles have you previously taken? Were these roles discussed and agreed upon, assigned,...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
Your team of four people form a financial analysis team at Aussie Finance Consulting (AFC), a renowned financial institution. The executive management of AFC has assigned you a task to carry out a...
-
On August 31, 2014, Nina Herrera borrowed $5,000 from Second State Bank. Herrera signed a note payable, promising to pay the bank principal plus interest on August 31, 2015. The interest rate on the...
-
In a certain rock, the ratio of lead atoms to uranium atoms is 0.300. Assume that uranium has a half-life of 4.47 x 109 y and that the rock had no lead atoms when it formed. How old is the rock?
-
Prove that for n 2, the hypercube Qn has a Hamilton cycle.
-
For ryegrass that was not infected with endophyte the following data were observed: Infestation Rate Number of Ryegrass Plants (n) log (n+1) X Y 0 16 2.83321 0 23 3.17805 0 2 1.09861 0 16 2.83321 0 6...
-
1. What type of trust is appropriate for remarried couples such as the Lipmans? How might your answer change if each spouse has sufficient assets to provide for himself or herself independently...
-
* Select the jobs of the operating system many answers Manage CPU and Memory Provide computer with power Provide user interface Cool down the computer
-
What are some career opportunities in the operations management discipline?
-
Pemberton Crafters reported $180,000 in interest expense for convertible bonds issued several years ago. The company is subject to a 30% effective tax rate There were no actual conversions during the...
-
In what ways do you see people buying into excuses or powerlessness?
-
Discuss the leadership clarity formula and how you will use it in the future.
-
We first assume thewind is uniform (w =constant,w1 = 0).Write the expression of the velocity of the boat along the axis of the wind vx = x in terms of w and h(tan ). For what values of and z is this...
-
What is a resistant pattern you see in another person?
-
Write a C code for circular queue implementation using linked list?
-
Consider the set of reversible, first-order reactions k k k3 A=B=C=D=E k-1 k-2 k-3 k-4 taking place in a well-mixed, batch reactor. The reactions are all elementary reactions with corresponding...
-
1. Using the information from Problem 16-4B, prepare a statement of cash flows for Lim Garden Supplies Inc. using the direct method of presenting cash flows from operating activities. 2. How does Lim...
-
The local chapter of the Rotary Foundation is planning a fundraiser. They estimate that renting the auditorium and paying for the sound system and performers and other costs would come to $15,000....
-
What three steps are followed under the account classification method to estimate the change in variable costs?
-
Zap, Inc., manufactures an organic insecticide that is marketed and sold via television infomercials. Each ZAP kit sells for $22, which includes a base price of $20 per ZAP kit plus $2 in shipping...
-
Why is it said that the PSNR principle has both a right and a duty side? Which one is most relevant with respect to international environmental law?
-
What, if any, is the normative content of the concept of SD?
-
Analyse the difference between the principle of prevention and precaution. Is it the same?
Study smarter with the SolutionInn App