Answer:
a. clinic's projected P&L statement.
Revenues 400,000
Less Expenses:
Wages and benefits (220,000
)
Rent (5,000
)
Depreciation (30,000
)
Utilities (2,500
)
Medical supplies (50,000)
Administrative supplies (10,000)
Net Income or (loss) before tax 182,500
Income tax at 30% (54,750)
Income or (loss) 127,750
b. 9,184 visits
c. 12,125 visits
Explanation:
Fixed Costs = 220,000 + 5,000 + 30,000 + 2,500 + 54,750
= $312,250
Contribution = Sales - Variable Costs
= $400,000 - ($50,000+$10,000)
= $340,000
Contribution per unit = $340,000 / 10,000 visits
= $34
Break even point = Fixed Costs / Contribution per unit
= $312,250 / $34
= 9,184 visits
Units for a Profit target = Fixed Costs + Target Profit / Contribution per unit
= ($312,250 + $100,000) / $34
= 12,125 visits
