show working

Styles 2-45 Hospital Patient Mix Study Appendix 2A. Hospitals measure their volume in terms of patient-days, which are defined as the number of patients multiplied by the number of days that the patients are hospitalized. Suppose a large hospital has fixed costs of $24 million per year and variable costs of $300 per patient-day. Daily revenues vary among classes of patients. For simplicity, assume that there are two classes: (1) self-pay patients (S) who pay an average of $500 per day and (2) non-self-pay patients (G) who are the responsibility of insurance companies and government agencies and who pay an average of $400 per day. Twenty percent of the patients are self-pay. 1. Compute the break-even point in patient-days, assuming that the planned mix of patients is maintained. 2. Suppose that 200,000 patient-days were achieved but that 25% of the patient-days were self-pay (instead of 20%). Compute the net income. Compute the break-even point