1. Breakeven point in patient days for year ended 30 June 19x9 assuming that 20 extra beds are not rented:
Breakeven = Fixed Costs / Patient Day Contribution Margin
Fixed Costs = Fixed Charge + Personnel Costs
Personnel Requirements =
Revenues / Mean Patient Day
(PD) Charge
$6,000,000 / $300 = 20,000 PD
Contribution Margin = Mean PD Charge -- Variable
PD Variable Cost =
$2,000,000 / 20,000 --
Contribution Margin = $300 - $100 = $200
Breakeven = $3,380,000 / $200 = 16,900 Patient Days
2. Net increase or decrease in earnings if 20 extra beds are rented:
Increase in Patient Days = 20 Beds x 90 days = 1,800 PD
Personnel Requirements = Existing PD + New PD
= 20,000 = 1,800
= 21,800 PD [No Change in Staff]
Fixed Costs: $2,900,000 / 60 beds = $48,333 per bed
$48,333 x 20 new beds = $ 966,667
Variable Costs = 1,800 PD x $100 = $ 180,000
Total Increase in Costs = $1,146,667
Increase in Revenue = 1,800 PD x $300 = $ 540,000
Net Decrease in Return = $ 606,667
Change in Cash Balance During Period
1Required completion of Schedule 2 to determine amounts.
2Required completion of Schedule 5 to determine amounts.
7. Budgeted Schedule for Cost of Goods Sold 20x1:
...