NR533 Week 5: Break-even Analysis Assignment V2
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Description
Total Points Possible: 100
Requirements
Answer the questions and complete the calculations required for the assignment.
Submit your answers on a Word document, with the heading of Week 5 Assignment. For the questions requiring a written response, answer directly on the assignment and adhere to proper grammar and syntax, and provide references. For the questions requiring calculations, show all of your work and follow the format that has been provided for the calculations in the lesson for Week 5. In addition, further explanations and formulas on the break-even analysis are contained in the required reading resources.
Key points for calculations
- When performing calculations, standard rounding rules apply. If the number to the right of the decimal is less than 0.5, round down to the nearest whole number, e.g., 33.4 = 33 If the number to the right of the decimal is 0.5 or greater, round up to the nearest whole number, e.g. 33.5 =34.
- Read the question carefully. Pay close attention to the units be asked and keep them consistent. For example, days vs months vs years; charges vs contribution margin; dollars vs percentage
- Provide ALL formulas with references. Designate which formula associates with which source. It is not sufficient to simply list the source at the beginning of the section. Write out the formula used BEFORE filling in the numbers. Formulas used should be taken from one of the required resources for this course.
Example: Total Contribution Margin (CM) = Contribution margin (CM) category 1 + CM cat 2 + CM 3
Leger, J.M. & Dunham-Taylor, J. (2018). Financial management for nurse managers: Merging the heart with the dollar, 4 th Ed. Burlington, MA: Jones-Bartlett.
Rubric
Week 5: Break Even Analysis Assignment
Solution
| Break-even Analysis Data Table | ||||||||
| Acuity Category | Percentage % | Charge per Visit | Visits per Year | Charges per Year | Visits per Day | Charges per Day | Contribution Margin | |
| Simple | 20% | $2000 | 1496 | $2,992,000 | 5 | $10,000 | $7500 | |
| Moderate | 70% | $6500 | 5236 | $34,034,000 | 17 | $110,500 | $102,000 | |
| Complex | 10% | $10,000 | 748 | $7,480,000 | 2 | $20,000 | $19,000 | |
| Expected Total Daily Charges | $140,000 | |||||||
| Expected Total Daily Revenue | $140,000 | |||||||
| Break-Even point in days | 76 patient days | |||||||
| Break-Even point in visits | 1824 visits | |||||||
- Describe your approach to this case study. In addition to the numbers given, what do you need to know before you can calculate the break-even analysis?
In this case study, I will start by identifying the variable costs and fixed costs which will later be combined into a single total cost line. The break-even point happens when the total cost line intersects with the firm’s revenue line. Besides, I will emphasize the firm’s profit contribution by observing the total visits that will be performed. As argued by Sintha (2020), break-even analysis involves a financial calculation that is critical in determining.
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