Children’s Hospital predicts variable costs of 70 per cent of total revenue and fixed costs of ₤42 million per year for 2011.

1. Compute the break-even point expressed in total revenue.

2. In 2011 Children’s Hospital expects total revenue of ₤150 million from 200,000 patient days. Compute

(a). Expected profit for 2011 if costs behave as expected, and

(b). Total profit if variable costs in 2011 are 10 per cent greater than predicted.