In 2013, the Gastroenterology Clinic of Pearland Medical Center had revenue totaling $14,550,400. The Gastroenterology Clinic costs data for a 12-month period from January 2013 through December 2013 were reported as follows: Month, 2013 Number of Patient
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In 2013, the Gastroenterology Clinic of Pearland Medical Center had revenue totaling $14,550,400. The Gastroenterology Clinic costs data for a 12-month period from January 2013 through December 2013 were reported as follows:
Month, 2013 | Number of Patient Visits | Gastroenterology Clinic Costs, $ |
January | 6,755 | 945,700 |
February | 6,620 | 946,660 |
March | 5,834 | 880,934 |
April | 6,228 | 927,972 |
May | 7,554 | 944,250 |
June | 7,620 | 914,400 |
July | 7,136 | 949,088 |
August | 7,440 | 959,760 |
September | 6,453 | 942,138 |
October | 5,325 | 825,375 |
November | 5,588 | 854,964 |
December | 7,020 | 961,740 |
- Find the fixed and variable portion of costs using the high-low method.
- Calculate the contribution margin, the contribution margin ratio, and the per-visit revenue, costs, and operating income.
- Discuss the importance of computation of the contribution margin in evaluating the relationship of cost, volume, and profit.
- In deciding to continue (or to discontinue) a service, which revenues currently do not cover total cost, which is more important in the short run, variable cost or fixed cost? In the long run (with more service volume)? Why?
9 years ago
In 2013, the Gastroenterology Clinic of Pearland Medical Center had revenue totaling $14,550,400. The Gastroenterology Clinic costs data for a 12-month period from January 2013 through December 2013 were reported as follows: Month, 2013 Number of Patient
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