1) Using the information in Table 1, construct a projected profit and loss statement for 2013 using the following assumptions:

The clinic is open 250 days per year

For all expense lines, use the higher of the 2012 average daily expense or the 2013 average daily expense

2) Recalculate the profit and loss statement if daily visits increase by 3 per day, 4 per day, and 5 per day (make sure to include the variable costs from Table 2 in your calculations). Submit the full profit and loss statement for each volume level. Based on your answers, what additional volume is required for the clinic break even?

3) Recalculate the profit and loss statement if daily visits increase by 11 per day (from 45 to 56) and by 15 per day (from 45 to 60) (make sure to include the variable costs and semifixed costs from Table 2 in your calculations). Submit the full profit and loss statement for each volume level.

4) Based on the profit and loss statements you created in questions 2 and 3, what additional volume generates the largest profit for the clinic?

5) What other factors would you consider in assessing whether the hospital should keep the clinic open?

Case 4 Better Care Clinic (Breakeven Analysis) Fairbanks Memorial Hospital, an acute care hospital with 300 beds and 160 staff physicians, is one of 75 hospitals owned and operated by Health Services of America, a for-profit, publicly owned company. Although there are two other acute care hospitals serving the same general population, Fairbanks historically has been highly profitable because of its well-appointed facilities, fine medical staff, and reputation for quality care. In addition to inpatient services, Fairbanks operates an emergency room within the hospital complex and a stand-alone walk-in clinic, the Better Care Clinic, located about two miles from the hospital. Todd Greene, Fairbanks