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    vanna97's Avatar
    vanna97 Posts: 2, Reputation: 1
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    #1

    Aug 17, 2009, 06:21 PM
    Computing break-even points
    There are variable costs of 50% of the revenue, and fixed costs of $40 million per year.
    There are 40,000 patient days estimated for the year
    The break even point expressed in total revenue is?
    ROLCAM's Avatar
    ROLCAM Posts: 1,420, Reputation: 23
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    #2

    Aug 17, 2009, 06:55 PM

    Let the break even point be x.

    Total Revenue = 40,000x

    .5(40,000x) + 40,000,000 = 40,000x

    20,000x + 40,000,000 = 40,000x

    20,000x = 40,000,000

    x = 2,000


    PROOF
    Total Revenue = 40,000 * 2,000= 80,000,000

    Total Expenses = 20,000x + 40,000,000 = 80,000,000

    CONCLUSION : Breaking Point $ 80 Million
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