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What volume is needed to give pretax profit of 100000

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Reference no: EM13477054

Assume that a radiologist group practice has the following cost structure:

Fixed costs                  $500,00

Variable cost per procedure           $25

Charge (revenue) per procedure   $100

Furthermore, assume that the group  expects to perform 7,500 procedures in the coming year.

a. Construct the group's base case projected P&L statement.

b. What is the group's contribution margin? What is its breakeven point?

c. What volume is required to provide a pretax profit of $100,000? Aoretax profit of $200,000?

d. Sketch out a CVP analysis graph depicting the base case situation.

e. Now assume that the practice contracts with one HMO, and the plan proposes a 20 percent discount from charges. Redo questions a, b, c under these conditions.

Reference no: EM13477054

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