Question: Cost-Volume-Profit at a Hospital Children's Hospital predicts variable costs of 70% of total revenue and fixed costs of $42 million per year for the coming year.
1. Compute the break-even point expressed in total revenue.
2. Children's Hospital expects total revenue of $150 million from 200,000 patient-days. Compute expected profit (a) if costs behave as expected, and (b) if variable costs are 10% greater than predicted.