Assume that a radiologist group practice has the following cost structure: Fixed costs $500,000 Variable cost...

Assume that a radiologist group practice has the following cost structure:

Fixed costs	$500,000
Variable cost per procedure	25
Charge (revenue) per procedure	100

Furthermore, assume that the group expects to perform 7,500 proce-
dures in the coming year.

a. Construct the group’s base case projected P&L statement.
b. part 1 - What is the group’s contribution margin? b. - part 2 - What is its breakeven point?
c. part 1 - What volume is required to provide a pretax profit of $100,000?
c - part 2 - A pretax profit of $200,000?

Expert Solution

CONTRIBUTION MARGIN IS IN DOLLAR TERMS AS NOTHING WAS MENTIONED

jeff jeffy answered 2 years ago

Assume that a radiologist group practice has the following cost structure: Fixed Costs $500,000 Variable cost...

Assume that a radiologist group practice has the following cost structure: Fixed Costs $500,000 Variable cost per procedure 25 Charge (revenue) per procedure 100 Furthermore, assume that the group expects to perform 7,500 procedures in the coming year. a. Construct the group's base case projected P&L statement Total revenues $ 750,000 Total variable costs $ (187,500) Total contribution margin $ 562,500 Fixed costs $ (500,000) Profit (net income) $ 625,000 b. What is the group's contribution margin? What is its...

5.3 Assume that a radiologist group has the following cost structure: Fixed costs $500,000 Variable cost...

5.3 Assume that a radiologist group has the following cost structure: Fixed costs $500,000 Variable cost per procedure $25 Charge(revenue) per procedure $100 Furthermore, assume that the group expects to perform 7,500 procedures in the coming year. a. Construct the group's base case projected P & L statement. b. What is the group's contribution margin? What is the breakeven point? c. What volume is required to provide a pretax profit of $100,000? A pretax profit of $200,000? e.Now assume that...

Assume that a radiologist group practice has the following cost structure: Fixed costs $200,000 Variable cost...

Assume that a radiologist group practice has the following cost structure: Fixed costs $200,000 Variable cost per procedure $200 Charge (price) per procedure $400 a. What is the group’s breakeven point in volume? b. Complete the following table. (Hint: total costs= fixed costs + (variable cost per procedure x procedures) Volume (Procedures) Fixed Costs Total Costs Total Revenue 0 100 200 300 400 500 600 700 800 900 1,000 1,100 1,200 1,300 1,400 1,500 c. Sketch out a breakeven graph...

1. 2 Assume that a cardiologist group practice has the following cost structure: Fixed Cost: $500,000...

1. 2 Assume that a cardiologist group practice has the following cost structure: Fixed Cost: $500,000 Variable Cost Per Procedure: $25 Furthermore, assume that the group expects to perform 7,500 procedures in the coming year. A. What is the group’s underlying cost structure? B. What are the groups expected total cost? C. What are the groups' estimated total costs at 5,000 procedures? At 10,000 procedures? D. What is the average cost per procedure at 5,000, 7,500 and 10,000 procedures?...

The problem: 5.6 The fixed cost for a group practice is $500,000, Variable cost per procedure...

The problem: 5.6 The fixed cost for a group practice is $500,000, Variable cost per procedure is 25 and the charge per procedure is 100. The group predicts to perform 7500 procedures in the year. How would I construct the group's base case projected P&L statement? What is the group's contribution margin? What is the breakeven point (in number of procedures)? What volume is required to provide a pretax profit of $100,000? A pretax profit of $200,000? Sketch out a...

Part 1) Assume that XYZ lab has the following cost structure: Fixed Costs = $450,000 Variable...

Part 1) Assume that XYZ lab has the following cost structure: Fixed Costs = $450,000 Variable cost per test = $20 Charge per procedure = $100 What volume is required to break even? What volume is required to generate a profit of $300,000? Part II) Using the data in Part I above, assume that Aetna proposes a 25% discount from charges, what volume would then be required to break even? Hint: Discount the charge per test before entering it into...

1. Bronx Lebanon Diagnostic Care has the following cost structure: Fixed Costs $800,000 Variable cost per...

1. Bronx Lebanon Diagnostic Care has the following cost structure: Fixed Costs $800,000 Variable cost per procedure $35 Charge (revenue) per procedure $110 Assume that the Bronx Lebanon Diagnostic Care expects to perform 7,500 procedures in the coming year. a. Construct the groups base case projected P & L statement. Insert your response here. b. What is the group’s contribution margin? Insert your response here. c. What is the breakeven point? (in number of procedures) Insert your response here. d....

Fixed costs are assumed to be $500,000 per year. The company estimates the variable cost per...

Fixed costs are assumed to be $500,000 per year. The company estimates the variable cost per unit (v) to be $75 and expects to sell each unit for $425. There are no taxes and the required rate of return is 22% per year. Suppose that sales are currently estimated to be 5000 units per month. What is the degree of operating leverage? (Round to 1 decimal place, ie 2.3) Using your answer from above, estimate what the new monthly operating...

2. Describe a fixed cost, variable cost. Explain why the variable and fixed costs are important...

2. Describe a fixed cost, variable cost. Explain why the variable and fixed costs are important in cost accounting. Give your opinion

1. A company that makes cell phones has the following cost structure. The have fixed costs...

1. A company that makes cell phones has the following cost structure. The have fixed costs of $145 000 per period and manufacturing costs of $15.16 per cell phone. Advertising is expected to be $25 000 per period and a special promotional contest will involve providing a free case for a cost of $5.30 per cell phone. Each cell phone sells for $49.95. What is the break-even point in the number of phones? 2. A pen manufacturer makes luxury pens....

Question