Question: Review the walk-in clinic data presented below, Construct projected P & L statements at volume levels of 8,000, 9,000, 10,000, 11,000, and 12,000 visits. visits
Review the walk-in clinic data presented below, Construct projected P & L statements at volume levels of 8,000, 9,000, 10,000, 11,000, and 12,000 visits.
| visits |
| 10,000 |
|
|
| |
| Revenues | 500,000 | |
| wages and benefits | 250,000 | |
| rent | 7,500 | |
| depreciation | 35,000 | |
| utilities | 2,800 | |
| med supplies | 55,000 | |
| administrative supplies |
| 12,000 |
a. Assume that the base case forecast is 10,000 visits. What is the clinics degree of operating leverage (DOL) at this volume level? Confirm the net incomes at the other volume levels using the DOL combined with the percent changes in volume. b. Now assume that the base case volume is 9,000 visits. What is the DOL at this volume?
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