Question

#1. Review the walk-in data presented below. Taxes are assumed to be 30%.

Revenues (10,000 visits) 500,000 $

Wages and benefits 210,000 $

Rent 5,000 $

Depreciation 32,000 $

Utilities 2,500 $

Medical supplies 50,000 $

Administrative supplies 20,000 $

Construct a projected P&L statements at volume levels of 8,000 units.

What would be the total revenues for this projected volume of 8,000 units?   
Choice: $200,000

Choice: $320,000

Choice: $380,000

Choice: $400,000

Answer 1

Revenue per visit = 500000/10000 = $50

Revenues at 8000 visits = 8000*50 = $400,000

Variable costs are : Medical supplies and administrative supplies. Others are fixed

These are computed as Original cost*8000/10000

Projected P&L Statement		8000 units
Revenues		400000
Less: Variable Expenses
Medical Supplies	40000
Administrative Supplies	16000
Total variable expenses		56000
Contribution		344000
Less: Fixed expenses
Utilities	2500
Rent	5000
Depreciation	32000
Wages and benefits	210000
Total fixed expenses		247000
Profit before taxes		97000
Less: Taxes		29100
Net Income		67900

WORKINGS