Assume that a raiologist group practice ahs the folloiwng cost structure. Fixed costs: $500,000; Variable cost per procedure: $25; Charge (revenue) per procedure: $100. Furthermore, assume that the group expects to perform 7,500 procedures in the coming year.
1. Construct the group's base case projected P&L statement; 2. What is the group's contribution margin? What is its breakeven point?; 3. What volume is required to provie a pretax profit of $100,000? A pretax profit of $200,000?; 4. Sketch out a CVP analysis graph depicting the base case situation.; 5. Now assume that the practice contracts with on HMO, and the plan proposes a 20% discount from charges. Redo questions 1-4 with these conditions.