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goldfiish [28.3K]
3 years ago
15

A hospital reports the following cost and revenue data: Variable cost per inpatient day of $250 Revenue per inpatient day of $10

00 Fixed costs of $15 million What is the expected profit at a volume of 25,000 inpatient days?
Business
1 answer:
REY [17]3 years ago
4 0

Answer:

Expected profit at a volume of 25,000 inpatient days = $3,750,000.00

Explanation:

The expected profit is calculated as follows:

<em>Step 1</em>

<em>Total contribution per inpatient from 25,000 inpatients</em>

contribution = (revenue - variable cost) per patient

= $(1000-250)

= $750 per inpatient day

<em>Total contribution for 25,000 inpatient days</em>

$750 × 25000 =  $18,750,000.00

<em>Step 2</em>

<em>Calculate Profit </em>

Profit = Total contribution - Fixed cost

         =$18,750,000.00 -$15,000,000

        =  $3,750,000.00

Expected profit at a volume of 25,000 inpatient days = $3,750,000.00

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