Discuss the below:
You will use the data provided below and conduct a profit (CVP) analysis. You will be graded based on your understanding of profit (CVP) analysis, the accuracy of your calculations, the validity of you conclusions and your ability to clearly communicate your analysis. To complete this assignment, follow these steps.
1. Assume the following information about cost and charges for a hospital in 2014:
Fixed Costs = $10,000,000
Variable cost per inpatient Day = $200
Charge Per Inpatient Day = $1,000.
Initial volume of 15,000 inpatient days
1. From what you have learned in these chapters estimate the: a) accounting breakeven point quantity (in terms of inpatient days) and breakeven dollar amount and b) the economic breakeven point quantity (inpatient days) and dollar amount.
2. Explain the contribution margin.
3. Write a short paper in the following format:
1. Cover page with your name, class/section and instructor's name
2. For each measure estimated above, in a paragraph: define the measure, explain the importance of that measure to the healthcare services manager.
3. Explain how these breakeven points would vary in a capitated and non-capitated environment. Provide a numerical example in a table to illustrate difference.