Hello, this case study has been answered before but I can't seem to find the solution. It is for the Lakeside Hospital case study.

TEMPLATE FOR UNIT 4 CASE ANALYSIS - LAKESIDE HOSPITAL QUESTION 1 (15 points) Q1.A Compute the breakeven volume for the Dialysis Unit under the following three assumptions: 1a: 100% capacity - (7 technicians, 7 nurses, and 1 administrator) 1b: 50% capacity - (no replacement of resigned employees) 1c. 50% capacity - (4 technicians, 4 nurses, and 1 administrator) Solution Variable costs (1) ... Medical supplies $493,806 (2).... Water usage $20,896 (3)... Purchase lab services $24,476 Total variable/Number of treatments =$539,178 / 5,736 = $ 94 Fixed costs (1) Professional salaries & wages $438,900 (2) Administrative expenses $45,720 (3) Depreciation $26,250 Fixed Costs = $510,870 1A. Step-cost functions (at 100% capacity - two shifts) 1B. Stepcost functions (at 50% capacity - no layoffs, $418,470 but no replacements) Salary & wages plus employee expenses (per year) @ 100% capacity $510,870 1C. Stepcost functions (at 50% capacity - one shift) 4 nurses+4 technicians + employee expenses $171,220 Page 1 of 5 Breakeven Point Analysis Solution Price (#treatments) = FC + v(#treatments) 1A. 100% capacity - two shifts (Fixed Cost) +vX = pX $250x = $510,870 + $94x X = 3,275 1A. 50% capacity - no layoffs (Fixed Cost) +vX = pX $250x = $418,870 + $173x X = 5,440 1B. 50% capacity - one shifts (Fixed Cost) +vX = pX $250x = $171,720 + $173x X = 2,230 Page 2 of 5 QUESTION 2 (15 points) What is a fair share of overhead at the current level of activity in the unit? Assume the following in examining this issue: (1) All overhead items whose allocation bases are related to the number of procedures may reasonable change in response to the reduction of the number of procedures performed in the Renal Dialysis unit. (2) all overhead items whose allocation bases are related to payroll will change in response to changes in total payroll of the Renal Dialysis unit. (3) Direct Payroll costs with January staff reductions annualized: $438,900 - $92,400 = $346,500. Note the Fixed Admin Salaries + fringe = $36,300. (4) There will be no changes in the level of costs for Depreciation, Operation of Plant, and Housekeeping, regardless of the reduction in output of the Renal Dialysis unit. Items 1A. 100% capacity 1B. 50% of capacity (2 shifts) 1C: 50% of capacity (1 shift) # of procedures 5,736 3,120 3,120 Laundry & Linen Dietary Physician salaries Medical supplies Pharmacy Medical Records Social Services Internship/res service General OH (allocated) Other Overhead (sq ft base) Admin & General TOTAL ALLOCATED COSTS Page 3 of 5 QUESTION 3 (10 points) What will happen to total costs and revenues at Lakeside if the dialysis unit is closed? (Calculate the incremental effect under the same three assumptions about capacity usage as from Question 1). . Items 1A. 100% capacity 1B. 50% (2 shifts) 1C: 50% (1 shift) # of procedures 5,736 3,120 3,120 Revenue/procedure $250 $250 $250 $1,434,000 $780,000 $780,000 Total revenue Total variables costs Step cost function Fixed costs (traceable) Total Traceable costs Performance Margin Based on solution from Q2 above TOTAL ALLOCATED OH Responsibility Margin Discussion (b) What other options are available, and what will be their financial consequences? Page 4 of 5 QUESTION 4 (5 points) What should Dr. Newell do? Dr. Newell should try to convince Dr. Lawrence to keep the dialysis center open. QUESTION 5 (5 points) What should Dr. Lawrence do? Dr. Lawrence should try to keep the dialysis center open, even though the hospital will still lose money. It will lose less money keeping the dialysis center open. He should also re-evaluate his costs. Page 5 of 5