Project #71566 - Case Study 2

1) Using the information in Table 1, construct a projected profit and loss statement for 2013 using the following assumptions:

  1. The clinic is open 250 days per year
  2. For all expense lines, use the higher of the 2012 average daily expense or the 2013 average daily expense

2) Recalculate the profit and loss statement if daily visits increase by 3 per day, 4 per day, and 5 per day (make sure to include the variable costs from Table 2 in your calculations).  Submit the full profit and loss statement for each volume level.  Based on your answers, what additional volume is required for the clinic break even?

3) Recalculate the profit and loss statement if daily visits increase by 11 per day (from 45 to 56) and by 15 per day (from 45 to 60) (make sure to include the variable costs and semifixed costs from Table 2 in your calculations).  Submit the full profit and loss statement for each volume level.

4) Based on the profit and loss statements you created in questions 2 and 3, what additional volume generates the largest profit for the clinic?

5) What other factors would you consider in assessing whether the hospital should keep the clinic open?

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Due By (Pacific Time) 05/19/2015 11:00 pm
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