Show me the steps to solve ::CHAPTER $5$: COST BEHAVIOR, COSTING, AND PROFIT ANALYSIS

Homework Problem $2\mathrm{.}3$

Triangle Health Center currently provides $2,500$ visits per year at a price of $$120$ per visit.

The variable cost per visit $($variable cost rate$)$ is $$60,$ and total fixed costs are $$80,000.$ The

business manager suggests that the center can increase the number of visits $10\%$ 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

b$.$ 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?