A hospital reports the following cost and revenue dа ta: Variable cost per inpatient day of $250 Revenue per inpatient day of $1000 Fixed costs of $15 million What is the expected profit at a volume of 25,000 inpatient days?

Question

Business

Mylie Miranda

6 January, 07:47

A hospital reports the following cost and revenue dа ta: Variable cost per inpatient day of $250 Revenue per inpatient day of $1000 Fixed costs of $15 million What is the expected profit at a volume of 25,000 inpatient days?

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Answers (1)

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Joey Blake · Answer 1

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

Explanation:

The expected profit is calculated as follows:

Step 1

Total contribution per inpatient from 25,000 inpatients

contribution = (revenue - variable cost) per patient

= $ (1000-250)

= $750 per inpatient day

Total contribution for 25,000 inpatient days

$750 * 25000 = $18,750,000.00

Step 2

Calculate Profit

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