General Hospital, a not-for-profit acute care facility, has the following cost structure for its inpatient services:
Fixed costs: $10,000,000
Variable cost per inpatient day: 200
Charge (revenue) per inpatient day: 1,200
The hospital expects to have a patient load of 15,000 inpatient days next year.
a) Construct the hospital's base case projected P&L statement.
b) What is the hospital's breakeven point?
c) What volume is required to provide a profit of $1,000,000? A profit of $500,000?