Consider the following cost and revenue data for Shasta Memorial Hospital: Fixed costs = $15,000,000. Variable...
Consider the following
cost and revenue data for Shasta Memorial Hospital:
Fixed costs = $15,000,000.
Variable cost per inpatient day = $250.
Revenue per inpatient day = $1,000.
What is the expected profit at a volume of 25,000 inpatient
days?
| a. |
-$3,750,000 |
|
| b. |
$0 |
|
| c. |
$1,750,000 |
|
| d. |
$2,750,000 |
|
| e. |
$3,750,000 |
Homework Answers
| Total revenue (25,000 * $1,000) | $25,000,000 |
| (-) Total variable cost (25,000 * $250) | $6,250,000 |
| Contribution margin | $18,750,000 |
| (-) Fixed costs | $15,000,000 |
| Profit | $3,750,000 |
Expected profit at a volume of 25,000 inpatient days is $3,750,000.
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