Contribution margin and its break even point

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Reference no: EM131309737

Thompson & Anders, Inc. wish to enhance the operations of their Radiology Department. After an extensive analysis of the healthcare financial performance, the following cost structure was determined. Please assist them with their cost behavior and profit analysis with the information below:

Fixed costs $500,000

Variable cost per procedure $25

Charge (revenue) per procedure $100

Furthermore, assume that the Department expects to perform 7,500 procedures in coming year. a. Construct the Radiology Department’s base case projected P & L statement b. What is the Department’s contribution margin and its breakeven point? c. What volume is required to provide a pretax profit of $100,000? A pretax profit of $200,000?

Reference no: EM131309737

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