Problem
Newton Medical Center is adding a new MRI machine to serve its growing cardiac service line business. This mega-slice machine (which refers to how "fast" the individual scans are done) will allow the facility to perform heart scans quicker and more efficiently.
Each procedure will take twenty (20) minutes, with ten (10) minutes allocated for clean-up. As such, two scans can be completed every hour. The facility will be open for a total of eight (8) hours each day - with staff allocated so that scans can be performed every hour without a break. Given a patient preference, the imaging center will be open a total of 250 days per year.
Based upon market analyses, the imaging center is expected to operate at 50% capacity initially. The estimated daily operating expenses are $6,267. Given the ultimate plans for growth, the facility will not incur additional expenses if volumes were to increase. The imaging center will bill $625 per scan.
At what point will the imaging center "break even" on a daily basis?
• How many more scans are needed to be completed for the center to cover its operating expenses - given the daily projection of revenue?
• At this level, what is the daily profit?
• What percentage increase does this equate to?