You are the director of an ambulatory surgery center. The center is a joint venture with 3 area surgeons.
Fixed Cost per year is $5,200,000
Average Price per Case is $2,200
Average Variable Cost per case is $1,425
Contribution=average price-Average variable cost =(2200-1425)=$77
Cases for breakeven= Fixed costs/Contribution =(5,200,000/775)=6709.68
According to the terms of the joint venture, each surgeon is to receive a $500,000 bonus on December 31, 2017. Recalculate the breakeven volume that will be required to ensure the bonus can be paid.