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Revenue (10,000 visits) $400,000
Wages and benefits $220,000
Rent $5,000
Depreciation $30,000
Utilities $2,500
Medical supplies $50,000
Administrative supplies $10,000
Construct projected P&L statements at volume levels of 8000 ,9000, 10000, 11000, 12000 visits.
a. Assume that the base case forecast is 10000 visits. What is the clinic's degree of operations leverage (DOL) at this volume level? Confirm the net incomes at the other volume levels using DOL combined with the percent changes in volume.
b. Now assume that the base case volume is 9000 visits. What is the DOL at this volume?
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