Case Study #1 Fall - Please respond to both parts A and B A. Grouping Revenue: Statements of Revenue by Source Brooklyn Borough Hospital is examining its inpatient services to determine the year-to-year change in revenue. After examining the chart below, please answer the questions listed. INPATIENT SERVICES 2022 Revenue 2023 Revenue Anticipated 2024 (millions) (millions) Revenue (millions) % $$ Internal Medicine $25 $26 Oncology $18 $19 Cardiology $32 $34 Neurology $12 $13 Pediatrics $7 $6 Obstetrics $9 $10 Surgery $22 $24 Psychiatric $13 $12 TOTAL $138 $144 QUESTIONS: WHAT IS THE PERCENTAGE OF GROWTH NOTED ON THE CHART FOR EACH TYPE OF SERVICE? 1. List the service lines with the fastest growth and the slowest growth based on your calculations. 2. Assuming that the hospital will grow at the same rate from 2023 to 2024 as it did from 2022 to 2023, what are the hospitals expected total revenue for 2024. B. Grouping Expenses: Fixed. Vs. Variable; Direct vs. Indirect Assume that Brooklyn Borough Hospital has pediatric group practice affiliated with the hospital and it has the cost structure shown below. Also assume that this pediatric group performs 7,500 procedures yearly. FIXED COSTS ARE $500,000 VARIABLE COSTS PER PROCEDURE is $25 Please answer the following questions? 1. Explain the differences between fixed and variable costs; explain direct and indirect costs. 2. What are the group's expected total costs? 3. What would be their costs pre procedure at 5,000 and 10,000? 4. How do the expenses impact net worth? 5. In anticipation of future costs, what types of costs would be considered direct costs and what would be considered indirect?