Question

#1. Review the walk

-

in data presented below. Taxes are assumed to be 30%.

Projections for 1st Year of Operations

Revenues (10,000 visits)

$

400,000

Wages and benefits

$

220,000

Rent

$

5,000

Depreciation

$

30,000

Utilities

$

2,500

Medical supplies

$

50,000

Administrative supplies

$

10,000

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?

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

Projections for 1st Year of Operations

Revenues (10,000 visits) $400,000

Wages and benefits $220,000

Rent $5,000

Depreciation $30,000

Utilities $2,500

Medical supplies $50,000

Administrative supplies $10,000

Construct a projected P&L statements at volume levels of 9,000 units. What would be the total

variable costs for a volume of 9,000 units?

Answer 1

Total revenues for this projected volume of 8,000 units

• Sales Revenue per visit = Total Sales Revenue / Number of total visits

= $400,000 / 10,000 Visits

= $40.00 per Visit

• Therefore, the Total revenues for this projected volume of 8,000 units

= Number of visits x Sales Revenue per visit

= 8,000 Visits x $40.00 per visit

= $320,000

“Total revenues for this projected volume of 8,000 units = $320,000”

Total variable costs for a volume of 9,000 units

-Here, the Variable Costs consisting of the Medical supplies and the Administrative supplies.

Total Variable costs for 10,000 Visits = $60,000 (Medical supplies of $50,000 and the Administrative supplies of $10,000)

The Variable cost per visits = $6.00 per visit ($60,000 / 10,000 Visits)

Therefore, the total variable cost for 9,000 Visit = $54,000 (9,000 Visits x $6.00 per visit)

“Therefore, the total variable costs for a volume of 9,000 units = $54,000”