What fee should they charge to obtain contribution margin

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Reference no: EM131577702

Let us suppose that a hospital wants to set their fees for an overnight stay such that the contribution margin on a hospital room will be 35%. The cost to the hospital of an overnight stay (staff, physical equipment, and supplies) is $400. What fee should they charge to obtain a contribution margin of 35%? [Hint: if the contribution margin is 35%, then the $400 cost is 65% of Operating Revenues.] What is the target fee for an overnight stay? Show calculations.

Reference no: EM131577702

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