Given data:
Charges per mammogram: $225
Average number of mammograms performed in a month: 200
Total monthly expenses related to mammogram procedure: $30,000
1. Average cost ratio for the mammogram procedure
Average monthly expenses of mammogram = 30,000$
Average monthly earnings from mammograms= number of mammograms performed per month * charges per mammogram
= 200 X 225 $
= 45000$ per month
Cost to expense ratio= average monthly cost: average monthly earning
= 4500:30000
=1.5 : 1
Hence the monthly cost benefit ratio is 1.5:1 or 50 percent.
1.
A. Average monthly earnings from mammograms= number of mammograms performed per month * charges per mammogram
= 200 X 225 $
= 45000$ per month
Total monthly expenses: 30,000$
: Since the monthly earning is more than monthly expenses, hence group practice is making a profit.
B. Amount of profit per mammogram
Profit per mammogram = Net profit from all mammograms/ total number of mammograms
= 15000$ / 200
= 75$ per mammogram
There is a net profit of 75$ per mammogram
Or it can also be calculated by another method as
Cost per mammogram procedure=
Total monthly expense of mammogram procedures in a month/Total number of mammograms performed in a month
=30000/200= 150$
Charges of mammogram procedure = 225$
Net profit= charges – cost
= 225-150
=75 $
C. Net monthly profit / earning = monthly earnings – monthly expenses
= 45,000 – 30,000$
=15,000$
There is net profit of 15,000$ Per month.
CASE STUDY 2 A group practice of radiologists charges $225 for a routine mammogram. Total expenses...
Assume that a radiologist group practice has the following cost structure: Fixed costs $500,000 Variable cost per procedure $25 Charge (price) per procedure $100 Furthermore, assume that the group expects to perform 7,500 procedures in the coming year. Part A a. Construct the group’s base case projected P&L statement. (See exhibit 5-5). b. What is the group’s contribution margin? c. What is the group’s breakeven point in volume? d. What volume is required to provide a pretax profit of $100,000?...
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My
question is about the case study “ Comparing Apples and Oranges:
which group yuelds the best profit?”
1) Using the Excel apreadsheet attached to complete the rooms
sold and revenue projections based on the above case study.
Case Study: "Comparing Apples and Oranges: Which Group Yields
the Best Profit?"
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