Assume that all costs are fixed except supply costs, which are variable. Assume that the clinic will
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Question:
Assume that all costs are fixed except supply costs, which are variable. Assume that the clinic will be required to pay taxes at a 30% tax rate. Respond to the following questions. How would I explain this in a word document form?
- Prepare the clinic's projected Profit and Loss (P&L) Statement.
- What number of visits is required to break even?
- What number of visits is required to provide you with an after-tax profit of $100,000?
Total Cost = Total Fixed Costs + (Variable Cost per Patient Visit * Number of Patient Visits)
(Administrative Supplies are a variable cost)
The hospital where you are employed is continuing with their analysis with the goal of opening a walk-in clinic. After conducting additional research, the financial projections for the first year of operations are as follows:
- Revenues (from 10,000 visits): $400,000
- Wages and benefits: $220,000
- Rent: $5,000
- Depreciation: $30,000
- Utilities: $2,500
- Medical supplies: $50,000
- Administrative supplies: $10,000
Related Book For
Managerial Accounting
ISBN: 9780073526706
12th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
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