Can I get some help with this question please?
Calculating break-even. Jasmine Gonzales, administrative director of Small Imaging Center, has been asked by the practice members to see if it is feasible to add more staff to support the practice’s mammography service, which currently has 2 analogue film or screen units and 2 technologists. She has complied the following information: • What is the monthly patient volume needed per month to cover fixed and variable costs? 1. Reimbursement per screen $66.05 2. Equipment costs per month $1,450.00 3. Technologist cost per mammography $15.60 4. Technologist aide per mammography $3.10 5. Variable cost per mammography $15.00 6. Equipment maintenance per month per machine $919.66 • What is the patient volume needed per month if Small Imaging Center desires to cover its fixed and variable costs and make a $5,000 profit on this equipment to cover other costs associated with the organization? • If reimbursement decreases to $60 per screen, what is the patient volume needed per month to cover fixed and variable costs but not profit? • If a new technologist aide is hired, what is the patient volume needed per month at the original reimbursement rate to variable costs, but not profit?
with p patients/month
cost: 1450 + 15.60p + 3.10p + 15.00p + 919.66
revenue: 66.05p
you want revenue = cost+5000, so p = 228
just adjust the revenue for a different rate
To calculate the break-even point and answer the different questions, we need to understand the components that contribute to the costs and revenues.
1. Fixed costs: These are costs that remain constant regardless of the volume of patient visits. In this case, the fixed costs include the equipment costs per month ($1,450.00) and the equipment maintenance per month per machine ($919.66).
2. Variable costs: These costs vary based on the number of patient visits. In this case, the variable costs per mammography are the technologist cost ($15.60), technologist aide cost ($3.10), and the actual variable cost per mammography ($15.00).
3. Revenue: Revenue is generated through the reimbursement per screen, which is $66.05.
Let's calculate the break-even point for each scenario:
1. Break-even point to cover fixed and variable costs and make a $5,000 profit:
To cover fixed and variable costs and make a profit, we need to calculate the total costs and divide it by the reimbursement per screen.
Total costs = Fixed costs + Variable costs
Total costs = (Equipment costs per month + Equipment maintenance per month per machine) + (Technologist cost per mammography + Technologist aide per mammography + Variable cost per mammography)
Profit = Revenue - Total costs
Given that profit is $5,000, we can rearrange the equation to calculate the break-even point:
Break-even point = (Fixed costs + Variable costs + Profit) / Revenue
2. Break-even point with a decreased reimbursement of $60 per screen:
To cover fixed and variable costs (but not profit), we need to calculate the break-even point using the decreased reimbursement.
Break-even point = (Fixed costs + Variable costs) / Decreased reimbursement
3. Break-even point with a new technologist aide:
To calculate the break-even point with the new technologist aide, we need to add the technologist aide cost to the variable costs.
Break-even point = (Fixed costs + Technologist aide cost + Variable costs) / Revenue
Now that we have the formulas, you can plug in the numbers from the given information to calculate the break-even points and answer the different questions.