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Variable costs per procedure

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Reference no: EM131531561

A new procedure suite is being constructed at Marcy North Hospital. The investment for this procedure suite is $450,000 for equipment costs and $50,000 for renovations. The desired return on investment is 12 percent. Once the procedure suite was completed, 5,000 patients were served during the first year and charged $340 for each procedure. The annual fixed cost for the procedure room is $1 million and the variable costs per procedure is $129.

  • What is the procedure room's profit?
  • Did this profit meet its desired ROI?
  • Why or why not?

Reference no: EM131531561

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