Posted by Luke on .
Omega System Services, a member of the Omega Health Foundation operates a free-standing ambulatory care center that averages $60 in charges per patient. Variable costs are approximately $10 per patient, and fixed costs are about $1.2 million per year. Using this data, how many patients must be seen each day, assuming a 365-day operation, to reach the break- even point?
annual income= 365*patientsperday*60
annual costs= 365*patientsperday*10+1,200,000
set the annual costs equal to annual revenue, and solve for patientsperday.
This is a very old problem, looking at the costs and billing numbers, maybe they were valid in 1930.
X = The # patients per day.
365X = The # of patients per year.
Income = 365x Pat./yr * $60/pat.
Income = 21,900x.
Costs=365x pat./yr * $10/pat + 1.2M,
Costs = 3650x + 1.2*10^6.
Income = Cost,
21,900x = 3650x + 1.2*10^6,
21900x - 3650x = 1.2*10^6,
18250x = 1.2*10^6,
X = 66 Patients per day.