Please utilize the information and table provided below to answer problems 6 and 7. Your nursing homes

CFO has asked you to conduct a breakeven analysis. Your organization defines output as a patient day. Its

present volume is 30,000 patient days. The average cost per day is $95.00. Present revenues and costs are

presented below:

Revenues:

Charge Patients (8,000 Patient Days) $1,000,000

Fixed-Price Patients (22,000 Patient Days) 1,980,000

Total Net Revenues $2,980,000

Costs:

Fixed Costs $1,350,00

Variable Costs ($50/PD) 1,500,000

Total ($95/PD) $2,850,000

Net Income $130,000

Using the information outlined in the table above, please answer the following two questions.

6. What is the breakeven in-patient days for this nursing home, assuming no profit is required?

7. If volume goes up 15 percent to 34,500 patient days and payer mix is unchanged, what will net income be?