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23 September, 00:04

A hospital reports the following cost and revenue dа ta: Variable cost per inpatient day of $250 Revenue per inpatient day of $1000 Fixed costs of $15 million What is the expected profit at a volume of 25,000 inpatient days?

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  1. 23 September, 00:16
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    Expected profit at a volume of 25,000 inpatient days = $3,750,000.00

    Explanation:

    The expected profit is calculated as follows:

    Step 1

    Total contribution per inpatient from 25,000 inpatients

    contribution = (revenue - variable cost) per patient

    = $ (1000-250)

    = $750 per inpatient day

    Total contribution for 25,000 inpatient days

    $750 * 25000 = $18,750,000.00

    Step 2

    Calculate Profit

    Profit = Total contribution - Fixed cost

    =$18,750,000.00 - $15,000,000

    = $3,750,000.00

    Expected profit at a volume of 25,000 inpatient days = $3,750,000.00
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