Question

The Harnett County Healthcare System wants to purchase an equipment for a healthcare procedure. Two models are considered, Model A or Model B. Model A has a fixed cost of 575,000 and variable cost of $150 per use, while Model B has a fixed cost of 590.000 and variable cost of $110 or use. The Healthcare System charges $400 per use of this equipment At will evel of demand (#uses) is the Healthcare system indifferent between the two models? Question 6 Needs Grading The Harnett County Healthcare System wants to purchase an equipment for a healthcare procedura. Two models are considered Model A or Model B. Model A has a fixed cost of $75,000 and variable cost of $150 per use, while Model B has a flyd cost of 590,000 and variable cost of 5110 per use. The Healthcare System charges $400 per use of this equipment Find the break even volume for Model A and Model B, respectively, Question 7 Needs Grading The Harnett County Healthcare System wants to purchase an equipment for a healthcare procedure. Two models are considered. Model A or Model B. Model A has a foxed cost of 5.000 and variable cost of $150 per use while Model B has a fored cost of $90,000 and variable cost of $110 per use. The Healthcare System charges $400 per use of this equipment of the demand for the procedure is expected to exceed the indifference volume, which model should be selected to maximize its profit? Explain how you reach your conclusion. This is a conceptual questions, no calculation is required to answer this question

Answer 1

300 310 Answer 6 Break even point in units (Fixed cost/Contribution margin per unit) Fixed cost Contribution margin per unit $75,000 250 $90,000 290 Selling price Variable cost per unit Contribution margin per unit Model A $400 $150 $250 Model B $400 $110 $290 7 Point of indifference Difference in fixed cost Difference in variable cost Answer in units $15,000 375 $40 Fixed cost Variable cost per unit Model A Model B $75,000 $90,000 $150 $110