BHS427 Module 2 Case

BHS427 MODULE 2 CASE
Name:
Grade Course:
Tutor’s Name:
(30 July 2011)
BHS427 Module 2 Case
1. The break-even point (BEP) is a point at the total cost and total revenue is equal. At BEP, the organization has neither incurred loss nor gained any profit (Levine, & Michele, 2008). Mathematically, the break-even point can be presented as
Total revenue (TR) = Total Cost (TC)
If P represents the unit sales price and X, the unit sales then P * X is equal to total revenue. In addition, if TFC represents Total Fixed Cost and V to represent the Unit Variable Cost (Cafferky, & Wentworth, 2010). Then TVC + (V *X) is equal to total cost.
Therefore:
P *X = TFC + (V * X)
TFC =P * X – (V * X)
TFC = (P -V) * X

X =
TFC = 90 000
Price per unit = 2100-200
= 1900
BEP= Total Fixed Costs / (selling price - variable costs)
BEP = 90000/ (1900 - 1200)
BEP= 128.6
BEP = 127patients
R Squared must scan approximately 127 patients at the General Hospital to break even for any given month.
2. For General Hospital to guarantee R Squared that, it will make a monthly profit of $10,000,
This can be shown by calculating BEP at that profit where the required profit per month became an additional fixed cost. Therefore;
Total Fixed cost will be = 90000 + 10000 = 100000
Thus, BEP= Total fixed costs / contribution margin
BEP = 100000/ (1900-1200)
BEP= 142.9
Therefore, BEP = 143 patients. Hence, for General Hospital to guarantee R Squared that it will make a monthly profit of $10,000 it is required to scan 143 patients.
3. If General Hospital can guarantee 125 patients per month, R squared will no...