Please prepare the homework problems in the form of a Word and/or Excel file. Try to use one file to submit your answers, if possible, and include the questions with your answers. You must show your calculations.

1. Your nursing home defines output as a patient day. Its present volume is 26,000 patient days. The average cost per day is $90.00. Present revenues and costs are presented below:
Revenues Amount
Charge Patients (6,000 Patient Days) $750,000
Fixed-Price Patients (20,000 Patient Days) $1,800,000
Total Net Revenues $2,550,000

Costs Amount
Fixed Costs $1,170,000
Variable Costs ($45/PD) $1,170,000
Total ($90/PD) $2,340,000

Net Income $210,000
Using this information, answer the following two questions:
a. What is the break-even in patient days for this nursing home, assuming no profit is required?
b. If volume goes up 10% to 28,600 patient days, and payer mix is unchanged, what will net income be?

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What is the formula to figure out these two problems?

I am trying to figure out which formula to use for this problem. For this one: (1-CO)F + NI /

= (CHxP1) +(FPxPE)-(1-CO)
my answer 66164 doesn't make sense.

For:
FixedCost/Price per case-Variablecost, my anser of $26,000 doesnt make sense either bcs that is the original # pt days Can you offer any advice?

If volume goes up 10 percent to 28,600 patient days and payer mix is unchanged, what will net income be?

Your nursing home defines output as a patient day. Its present volume is 26,000 patient days. The average cost per day is $90. Present revenues and costs are presented below:

Revenues:
Charge patients (6,000 patient days)
$750,000
Fixed-price patients (20,000 patient days)
$1,800,000
Total net revenues
$2,550,000
Costs:
Fixed costs
$1,170,000
Variable costs ($45/PD)
$1,170,000
Total ($90/PD)
$2,340,000
Net income
$210,000
If volume goes up 10% to 28,600 patient days and payer mix is unchanged, what will the net income be? (show your work)

To solve these problems, we need to understand the concept of break-even point and how to calculate net income.

a. The break-even point is the point at which the revenue is equal to the total costs, resulting in zero profit or loss. In this case, we assume no profit is required, so the break-even point is when the net income is zero.

To calculate the break-even point in patient days, we need to equate the total costs to the total revenues and solve for the number of patient days.

Total Costs = Total Revenues
Fixed Costs + Variable Costs = Charge Patients Revenue + Fixed-Price Patients Revenue

$2,340,000 = $750,000 + $1,800,000

Now, let's solve the equation:

$2,340,000 = $2,550,000 - Net Income
$2,340,000 = $2,550,000 - 0 (no profit required)

Therefore, the break-even point in patient days is 26,000.

b. To calculate the net income when the volume increases by 10% to 28,600 patient days, we will use the following formulas:

Net Income = Total Net Revenues - Total Costs
Total Costs = Fixed Costs + Variable Costs
Variable Costs = Variable Cost per Patient Day * Number of Patient Days

First, let's calculate the variable costs for the new volume:

Variable Costs = $45/PD * 28,600 PDs = $1,287,000

Now, let's calculate the total costs:

Total Costs = Fixed Costs + Variable Costs
Total Costs = $1,170,000 + $1,287,000 = $2,457,000

Finally, let's calculate the net income:

Net Income = Total Net Revenues - Total Costs
Net Income = $2,550,000 - $2,457,000 = $93,000

Therefore, if the volume goes up by 10% to 28,600 patient days, the net income will be $93,000.