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Submitted By peter88
Words 288
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For Case 3-1: answer questions 1 - 5.

Breakeven Volume Analysis
Varible costs
Medical Supplies: $493,806
Purchased Laboratory Services: $24,476
Water Usage: $20,896
Total Variable Costs: $539,178
Number of treatments: 5,736
Total Variable Cost / Number of treatments
$539,178 / 5,736 = 94

Px = a + bx
$250x = $510,870 + 94x
$156x = $510,870
($156x = $510,870)/$156 = 3274.81
3274.81 treatments per year
7 nurses -1 $35,000/7 = $5,000 bi-monthly / 2 = $2,500 monthly
($2,500 monthly)12 = $30,000 per year
7 techs -1 $30,680/7 = $4382.86 bi-monthly(2 Employees)/ 2 = $4382.86 monthly
($4382.86 monthly)12 = $52,594.29 per year
$30,000 per year + $52,594.29 per year = $82,594.29 per year total payroll last year = $436,800
$436,800 - $82,594.29 = $354,205,71 projected payroll with 3 less employees
$354,205.71/$436,800 = 81.1% of previous years payroll expenses

Medical Supplies: $493,806
Purchased Laboratory Services: $24,476
Water Usage: $20,896
Are variable expensed and Depreciation is a fixed expense

Fair Share of Overhead:
@ 50% Capasity
120 Treatments per week / 2 = 60 Treatments per week
(60 Treatments per week)(52 weeks in a year) =
3120 Treatments per year @ 50% Capacity
Treatments per year @ 50% Capacity / Number of treatments last year: 5,736 =
3,120/5,736 = 54.4%
Fixed Overhead; Depreciation, Operation of Plant, Housekeeping
$4,778 + $4,281 + $3,411 = $12,470
Variable per treatment: Laundry and Linens, Dietary, Physician Salaries, Medical Supplies, Pharmacy, Social Services, Intern and Resident Services
$1,782 + $9471 + $65,477 + $279 + $1,827 + $50,878 + $10,425 = $140,139
$140,139(.544) = $76,235.62…...

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