In this assignment you are asked to determine how much ClearEye's pre-tax profit would change if the increased patient yield (increase of patients having their operations at ClearEyes from 5,283 to 6,669) were accomplished You will need to become familiar with Exhibt 5, Revenues and Expenses, of the ClearEyes Case. You will be asked to develope a new Revenues and Expenses chart based on the following changes to revenue and costs: a. Revenue will increase because of the increase in the number of procedures. Net revenue per procedure remains the same at $1,338. b. Direct Variable Costs will increase based on the increased number of procedures. Direct Variable Cost per procedure remains at $480 per procedure c. Wages will remain the same except for the following: 1. Surgeon. A new part-time surgeon (30%) has been hired. The cost per case for the new surgeon will be the same as currently being paid to Dr. Zincola, $83.37. Dr. Zincola and the part-time surgeon will preform 5,997 operations (6,669 - 672 (to be performed by Dr. Connors)). 2. Management decided to hire one additional technician d. Benefits will increase based on increased labor costs (multiply total labor costs by 28%) e. Other Costs will remain the same except for the following 1. These three items will increase proportionately with patient volume (26.2351%): a) Cleaning and maintenance b) Legal c) Miscellaneous 2. Depreciation. This item equals the current amount + 15% x (new equipment charge of 11,000 (chairs) + 1 surgical room for 93,000) Find a copy of the Financial Matrix you will be asked to complete and submit. HERE SET CELL FORMAT FOR COLDREFOR CURRENCY ZERO DECIMAL PLACES Clearbyes Cataract clinic Revenues and Expenses Change * Change Current Yield Higher yield(col-colo (col/cold) Procedures per year. 5,283 6,669 1386 26.23515 Per Formulas for Cole Procedure w changes to yield Revenues 5.1.338 net revenue per procedure $1,338 $7,068,654 $8,923,122 51,854 468 26.2351% -5C7 Costs Direct Variable cost per procedure $480 52,535,840 $3,201, 1205665,280 25.2351% -5C11 Wages Surgeon $200,000+ $40/operation + 3 Surgeon $384.440 $499,997 $115,557 30.0586% ES-672) "014 Surgeon cost per operation (4611 ops) $53.37 1 Receptionist 38,000 $38,000 A PSRS 38,000 $152,000 3 Technicians 48,000 +1 additional Tech $144,000 448000 i Cleaner @31,000 $31,000 Sub-total Wages $749,440 SUME 13:16 Benefits at 28 of labor costs $209,543 19*0.28 Sub-total Direct var Costs - wages Benefits $3,495,125 11-019-621 Other Costs Advertising $48,000 Facility Cost net of rent $36,000 Cleaning and Maintenance (Inc. 26.23514) $36,000 0271-5955) Other facility Insurance, IT, various 590,238 Legal (Inc. 26.2351%) $280,969 029' (1-5655) Miscellaneous (Inc. 26.23315) $80,420 0301-5655 Accounting 590,000 Depreciation (New Equip Charge: $11,000 for $160,000 *032-(11000 93000)*0.15 chairs +593,000 for new surpical room] 15% Sub-total (Other Costa) 5821,627 Sum 25:32) PRE-TAX INCOME $2,751 904 -E7-023-34 (Revenue - (Dir Var costs - Wapes + Benefits - Other Costa) Pretax earnings is calculated by subtracting a firm's operating expenses from its rost martin or revenue. Question 1 10 pts Please complete the financial matrix a comparing the revenues and expenses of the current and higher yield and upload the document here. Use the information included in the Quiz Instructions above to make the appropriate changes in revenue and costs for the higher yield. Enter the change and the % change between the current and higher yield. Upload Choose a File Question 2 5 pts Enter the change in Revenue that would occur with the increased patient yield. HINT: Look at the Revenues row, Change column. Question 3 5 pts Enter the change in Direct Variable Costs between the current and higher yield. HINT: Look at the Direct Variable Cost per procedure row, Change column. Question 4 5 pts Enter the change in Total Wages (excluding benefits) between the current and higher yield. HINT: Look at the Subtotal Wages row, Change column. Question 5 5 pts Enter the change in benefits between the current and higher yield. HINT: Look at the Benefits row, Change column. Question 6 5 pts Enter the change in Other Costs between the current and higher yield. HINT: Look at the Sub-total (Other Costs row, Change column. Question 7 5 pts Bottom Line: By how much would ClearEyes' pre-tax income increase if staff were able to increase the number of patients having their operations to 6669? Question 8 5 pts By what percent would ClearEye's pre-tax income increase if staff were able to increase the number of patients having their operations to 6669? Enter your answer in the following format: ### 99 ClearEyes a Exhibit 5 Revenues and Expenses Procedures per year: Revenues: $1,338 net revenue per procedure 5,283 $7,068,654 Costs $480 Wages Direct Variable Cost per procedure Surgeon $200,000+ $40/operation 1 Receptionist @ $38,000 4 PSRs @ $38,000 3 Technicians @ $48,000 1 Cleaner @ $31,000 at 28% of labor costs $2,535,840 $384,440 $38,000 $152,000 $144,000 $31,000 $209,843 Benefits Other Costs Advertising Facility cost net of rent Cleaning and maintenance Other facility insurance, IT, various Legal Miscellaneous Accounting Depreciation $48,000 $36,000 $36,000 $90,238 $280,969 $80,420 $90,000 $160,000