Question

Using the same graph (in BOLD) for all question please answer and show work for the following

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

1. Construct a projected P&L statements at volume levels of 10,000 units. What would be the total fixed costs for a volume of 10,000 units?   
Choice: $189,000

Choice: $249,500

Choice: $257,500

Choice: $275,500

2.Construct a projected P&L statements at volume levels of 11,000 units. What is the taxable income for a volume of 11,000 units?   
Choice: $180,500

Choice: $100,000

Choice: $116,500

Choice: $223,500

3. Construct a projected P&L statements at volume levels of 12,000 units. What is the profit for a volume of 12,000 units?
Choice: $105,350

Choice: $135,000

Choice: $186,550

Choice: $211,800

Answer 1

(1)-The total fixed costs for a volume of 10,000 units

	Amount ($)	Amount ($)
Revenue (10,000 Visits x $50 per visit)		500,000
Variable Costs
Medical Supplies	50,000
Administrative Supplies	20,000	70,000
Fixed Costs
Wages and Benefits	210,000
Rent	5,000
Depreciation	32,000
Utilities	2,500	249,500
Taxable Income		180,500
Less: Tax at 30%		54,150
Net Income		126,350

Therefore, the The total fixed costs for a volume of 10,000 units = $249,500

(2)- The taxable income for a volume of 11,000 units

Selling Price per visits = $50 per visit [$500,000 / 10,000]

Variable cost per visit = $7.00 per visit [$70,000 / 10,000]

	Amount ($)	Amount ($)
Revenue (11,000 Visits x $50 per visit)		550,000
Less: Variable cost [11,000 x $7]		77,000
Less: Fixed Costs		249,500
Taxable Income		223,500

“Therefore, The taxable income for a volume of 11,000 units = $223,500”

(3)- The profit for a volume of 12,000 units

	Amount ($)	Amount ($)
Revenue (12,000 Visits x $50 per visit)		600,000
Less: Variable cost [12,000 x $7]		84,000
Less: Fixed Costs		249,500
Taxable Income		266,500
Less: Tax at 30%		79,950
Net Profit		186,550

“The profit for a volume of 12,000 units = $186,550”