1.Capacity = 60 beds
Revenues = $12,000,000
Billing per patient per day = $800
Patient Days = Revenue/Bill per patient per day
= 12,000,000/800
= 15,000
2.Total Fixed Expenses except nursing expenses = $5,900,000
Bill per patient per day = $800
Variable Cost per patient per Day = $3,150,000/15,000
= $210
Contribution Margin per patient day = $590
Required patient days = 5,900,000/590
= 10,000
3.Including nursing cost of 10,000-12,000 volume level, nursing cost = 30*45,000 = $1,350,000
Other Fixed Costs = $5,900,000
Total Fixed Costs = $7,250,000
Bill per patient per day = $800
Variable Cost per patient per Day = $3,150,000/15,000
= $210
Contribution Margin per patient day = $590
Required Patient Days = 7,250,000/590
= 12,288.14
Since the volume level is more than 12,000, nursing cost will be higher
Break even point will be calculated as:
Including nursing cost of 12,001-16,000 volume level, nursing cost = 35*45,000 = $1,575,000
Other Fixed Costs = $5,900,000
Total Fixed Costs = $7,475,000
Bill per patient per day = $800
Variable Cost per patient per Day = $3,150,000/15,000
= $210
Contribution Margin per patient day = $590
Required Patient Days = 7,475,000/590
= 12,669.50
4.Revenue per patient day = $800
Variable Cost per patient day = $210
Nursing cost per patient day = $200
Contribution Margin per patient day = $390
Total Fixed Costs = $5,900,000
Break-even point = 5,900,000/390
= 15,128.21 patient days
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