In: Finance
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).