Determine the break

$-$

even point. Show your work. Answer the following questions after you calculate the BE point.

If the physician refers

$500$

$$X

$-$

rays per year, is it wise to add this service to her practice?

If break

$-$

even point shows that she would lose money by offering the radiology service, what factors could she alter to afford the service?

If the physician wanted to make a $

$10$

$,$

$000$

$$profit$,$ what would the BE point be

$?$

Cost of new radiology equipment

$-$

$-$

$

$75$

$,$

$000$

$$over

$3$

$$years$.$

Increase in malpractice insurance

$-$

$-$

$

$10$

$,$

$000$

Expected revenue per test

$-$

$-$

$

$250$

Cost of supplies

$-$

$-$

$

$15$

Salary for Rad. Tech

$-$

$-$

$

$40$

$,$

$000$

Radiologist fee

$-$

$-$

$

$45$

Formula: Fixed costs

$+$

$$Annual Equipment cost

$/$

$$Revenue

$-$

$$Variable Expenses

$=$

$$Break Even Point.

Profit formula: Same as BE point formula, but add the desired profit to the fixed costs