Revenue per case and the annual fixed and variable costs

Reference no: EM13335911

Southwest hospital has an operating room used only for eye surgery. The annual cost of rent, heat and electricity for the operating room and its equipment is $360,000, and the annual salaries of the people who staff this room total $ 540,000. Each surgery requires the use of $760 worth of medical supplies and drugs. To promote goodwill, every patient receives a bouquet of flowers the day after surgery. In addition, one quarter of the patients require dark glasses, which the hospital provides free of charge. It costs the hospital $30 for each bouquet of flowers and $40 for each pair of glasses. The hospital recieves a payment of $2000 for each eye operation.

1. Identify the revenue per case and the annual fixed and variable costs for unning the operation room.

2. How many eye operations must the hospital preform each year in order to break even?

Reference no: EM13335911

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