Greenfield Medical Clinic is a state-of-the-art healthcare facility dedicated to providing comprehensive and compassionate medical care to individuals of all ages. Located in the heart of the city, Greenfield Medical Clinic offers a wide range of services, encompassing preventive care, diagnostic evaluations, and treatment options for various medical conditions.

Greenfield's team consists of highly skilled and experienced healthcare professionals, including doctors, nurses, and support staff who are committed to delivering personalized care tailored to each patient's unique needs.

Greenfield Medical Clinic has the following revenue and costs:

Average revenue per patient visit: $265

Average cost for supplies for each patient visit: $8

Average cost for medicines and vaccines for each patient visit: $35

Average cost for lab and diagnostic tests for each patient visit: $20

Total annual fixed costs: $485,000

1. Assume that Greenfield Clinic sees 3,500 patients a year. What is their current operating leverage?

1. What would Greenfield Clinic's operating leverage be if they were able to increase the number of patient visits per year to 3,750?

1. What explains the difference in operating leverages calculated in your answers to part a and part b?

1. Assuming the original 3,500 annual patient visit volume, what would be Greenfield Clinic's operating leverage if they could buy a machine at an annual cost of $30,000 that would reduce their costs of providing lab and diagnostic tests by $10 per patient?

1. What effect does the proposed change to their cost structure in part d have on Greenfield Clinic's risk (i.e., increase, decrease or have no effect)? Why?

Answer rating: 100% (QA)

Part a Current Operating Leverage Contribution Margin Fixed Costs 265 8 35 20 485000 024 or 24 This ... View the full answer