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What is the target fee for an overnight stay

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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 32%. The cost to the hospital of an overnight stay (staff, physical equipment, and supplies) is $450. What fee should they charge to obtain a contribution margin of 32%? [Hint: if the contribution margin is 32%, then the $450 cost is 68% of Operating Revenues.]

What is the target fee for an overnight stay?

Reference no: EM131185891

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