Assume that a radiologist group practice has the following coststructure:Fixed costsVariable cost per procedureCharge (revenue) per procedure$500,00025100Furthermore, assume that the group expects to perform 7,500 proce-dures in the coming year.a. Construct the group's base case projected P&L statement.b. What is the group's contribution margin? What is its breakevenpoint?c. What volume is required to provide a pretax profit of $100,000? Apretax profit of $200,000?d. Sketch out a CVP analysis graph depicting the base case situation.e. Now assume that the practice contracts with one HMO, and theplan proposes a 20 percent discount from charges. Redo questionsa, b, c, and d under these conditions.

The objective of the question is to understand the financial performance of a radiologist group…

Answered: Assume that a radiologist group…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Post a listing of recommendations - with full explanations - regarding areas of possible cost savings for the company. Include recommendations for at least four of the six activities, and your targeted savings is at least $1 million (~ 25%). Be specific and explain how the cost savings will be achieved. Activities that can be reduced listed on the picture.
Orlando Clinic has fixed costs of $800,000, a variable cost per visit of $60, and revenue per visit of $100. For this clinic (within the relevant range), which of the following statements is most correct? O Higher volume leads to higher total costs. O Higher volume leads to higher average costs. O Higher volume leads to a higher contribution margin per unit. O Higher volume leads to lower contribution margin per unit.
Analysis of a project: In determining the annual profit of a project the following information is used: Variable costs are S /. 10 per unit, fixed costs vary according to the level of production in the following image: If the sale price is S /. 24 and sales of 15,000 units are expected, in addition, an annual profit of S /. 140,000. How many additional units must be sold at a price of S /. 20?
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A thermoplastic film manufacturer is trying to decide between 8 types of thermoforming molding processes to be added to its molding operation. The estimated costs and revenues are shown below. Compare them on the basis of the IRR method and determine which process should be selected if the company's MARR is 7% per year. B C D E F G Initial Costs $13,000 $12,00o $11,000 $12,500 $16,000 $26,000 $19,500 Annual expenses $6,550 $9,125 $7,000 $8,000 $7,000 $11,000 $12,000 $13,000 Annual revenue $9,000 $10,000 $9,500 $13,500 $16,000 $16,200 Lifetime(years) 9. 9 9. 9. IRR 11.54% 6.88% 9.17% 11.81% 5.24% 4.86% 6.48% Perform an IRR-incremental analysis to find the best alternative.
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