Problem
Seattle Radiology Group plans to invest in a new CT scanner. The group estimates $1,500 net revenue per scan. Preliminary market assessments indicate that demand will be less than 5,000 scans per year. The group is considering a scanner (Scanner A) that would result in total fixed costs of $1,000,000 and would yield a profit of $500,000 per year at a volume of 5,000 scans. What is the implied variable cost rate (variable cost per scan) for Scanner A?