Problem 3 Burleson Clinic has fixed costs of $2,000,000 and an average variable cost rate of...
Problem 3
Burleson Clinic has fixed costs of $2,000,000 and an average variable cost rate of $15 per visit. Its sole payer, an HMO, has proposed an annual capitation payment of $150 per each of its 20,000 members. Past experience indicates the population served will average two visits per year.
a. Construct the base case projected P&L statement on the contract.
P & L Statement
Revenue 3,000,000
Variable costs 600,000
Gross profit 2,400,000
Fixed costs 2,000,000
Net profit $400,000
b. Sketch out a CVP analysis graph depicting the base case situation with number of visits on the x-axis. (Hint: use Excel to produce the sketch. When done, copy/paste the sketch below).
I NEED B ANSWERED ONLY PLEASE
Homework Answers
Answer:
CVP analysis graph depicting the base case situation with number of visits on the x-axis.
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Problem 3
Burleson Clinic has fixed costs of $2,000,000 and an average
variable cost rate of...
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