Millbridge Memorial Hospital (MMH) provides comprehensive physical exams. The charge per exam is $100, while the variable cost per exam is $65. Thirty percent of the patients who come in for exams are private pay. They must pay the full charge. Seventy percent of the patients are covered by an insurance company that has an agreement with MMH that reduces the charge by 20 percent. MMH has $210,000 in fixed costs per year. How many exams must MMH provide in order to break even?
Millbridge Memorial Hospital (MMH) provides comprehensive physical exams. The charge per exam is $100, while the variable cost per exam is $65. Thirty percent of the patients who come in for exams are private pay. They must pay the full charge. Seventy percent of the patients are covered by an insurance company that has an agreement with MMH that reduces the charge by 20 percent. MMH has $210,000 in fixed costs per year. How many exams must MMH provide in order to break even?
Chapter15: Choice Of Business Entity—other Considerations
Section: Chapter Questions
Problem 71P
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Millbridge Memorial Hospital (MMH) provides comprehensive physical exams. The charge per exam is $100, while the variable cost per exam is $65. Thirty percent of the patients who come in for exams are private pay. They must pay the full charge. Seventy percent of the patients are covered by an insurance company that has an agreement with MMH that reduces the charge by 20 percent. MMH has $210,000 in fixed costs per year. How many exams must MMH provide in order to break even? |
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