(1) Dr. Jerry Boyle is a Board Certified Gastroenterologist who practices in Columbus, Ohio. Among other...
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(1) Dr. Jerry Boyle is a Board Certified Gastroenterologist who practices in Columbus, Ohio. Among other things, he performs colonoscopy screening for patients in order to detect and remove colon polyps or cancer. In carrying out his job, he uses expensive equipment that he has leased from the manufacturers. The annual fixed costs for use of this equipment is $70,000. Other component of annual fixed costs -- including rent and pay for the nursing manager amounts to $90,000. The variable costs for conducting a colonoscopy on a patient which includes cost of disposable gloves, hospital linen, etc. is $50.00. Insurance companies pay the clinic $850.00 per patient that gets a colonoscopy in Dr. Boyle's clinic. Assuming that the center operates for 50 weeks in a year. (a) How many patients does Dr. Boyle's clinic need to process per year in order to breakeven? [3 points] (b) What would be the clinic's weekly profit (loss) if the forecast volume of patients in 2021 is 4 times as many patients as the breakeven volume obtained in part (a) above? Indicate whether it is a profit or loss. [4 points] (c) What would be the clinic's weekly profit (loss) if the forecast volume of patients in 2022 is 25% less than the breakeven volume obtained in part (a) above? Indicate whether it is a profit or loss. [4 points] (1) Dr. Jerry Boyle is a Board Certified Gastroenterologist who practices in Columbus, Ohio. Among other things, he performs colonoscopy screening for patients in order to detect and remove colon polyps or cancer. In carrying out his job, he uses expensive equipment that he has leased from the manufacturers. The annual fixed costs for use of this equipment is $70,000. Other component of annual fixed costs -- including rent and pay for the nursing manager amounts to $90,000. The variable costs for conducting a colonoscopy on a patient which includes cost of disposable gloves, hospital linen, etc. is $50.00. Insurance companies pay the clinic $850.00 per patient that gets a colonoscopy in Dr. Boyle's clinic. Assuming that the center operates for 50 weeks in a year. (a) How many patients does Dr. Boyle's clinic need to process per year in order to breakeven? [3 points] (b) What would be the clinic's weekly profit (loss) if the forecast volume of patients in 2021 is 4 times as many patients as the breakeven volume obtained in part (a) above? Indicate whether it is a profit or loss. [4 points] (c) What would be the clinic's weekly profit (loss) if the forecast volume of patients in 2022 is 25% less than the breakeven volume obtained in part (a) above? Indicate whether it is a profit or loss. [4 points]
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