Homework Problem $2\mathrm{.}3$

Triangle Health Center currently provides $1,000$ visits per year at a price of $$50$ per

visit. The variable cost per visit $($variable cost rate$)$ is $$30,$ and total fixed costs are

$$15,000.$ The business manager suggests that the center can increase the number of

visits to $1,200$ per year by cutting the price per visit by $$5$ and increasing the fixed

advertising budget by $$5,000.$

a$.$ Construct the base case projected P&L statement based on initial

projections with no change

Construct the base case projected P&L statement incorporating

the changes suggested by the manager

c$.$ What level of volume $($# of visits$)$ is needed for

the clinic to breakeven after incorporating the changes?