5. Janet Gilbert is director of labs. She has some extra capacity and has contracted with some small neighboring hospitals to run some of their lab tests. She has recently had a study conducted and has determined that her costs of these contracts are $10,000 of which $7,000 are for supplies and items related to each test. She currently charges an average of $10.00 per lab test. She is thinking of lowering her price by 20 percent in hopes of raising her current volume of 10,000 tests by 15 percent.

Question

Mathematics

Johnathan Salazar

7 March, 04:34

5. Janet Gilbert is director of labs. She has some extra capacity and has contracted with some small neighboring hospitals to run some of their lab tests. She has recently had a study conducted and has determined that her costs of these contracts are $10,000 of which $7,000 are for supplies and items related to each test. She currently charges an average of $10.00 per lab test. She is thinking of lowering her price by 20 percent in hopes of raising her current volume of 10,000 tests by 15 percent.

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Graham Huff · Answer 1

Check the explanation

Step-by-step explanation:

Present predicted

Revenue - per test 10000 8000

Variable cost - per test 7000 7000

Contribution - per test 3000 1000

Net income (10,000 test - 11,500 tests) 30,000,000 11,500,000