Martin Hospital has overall variable costs of 20 percent of total revenue and fixed costs of $40 million per year.

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

2. A patient-day—which is one patient spending one day in the hospital—is often used to measure the volume of a hospital. 

Suppose there are to be 40,000 patient-days next year. Compute the average daily revenue per patient-day necessary to break even.