Question

In: Finance

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 depicting the BE point. (Hint: use Excel to produce the graph. When done, copy/paste the graph on the space provided below).

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