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Calculations - Mod 3

This document analyzes the costs and revenue of a community health center (CHC) to calculate the number of additional visits needed to break even. It considers staff as either fixed or variable costs. Treating nurses, physical therapists, and social workers as variable costs requires 631 additional visits to breakeven, rather than 364 visits if they are fixed costs. The document emphasizes that accurately classifying costs as fixed or variable is important for determining the break even point and examines capacity, productivity and staffing levels.

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chatterjee rik
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96 views3 pages

Calculations - Mod 3

This document analyzes the costs and revenue of a community health center (CHC) to calculate the number of additional visits needed to break even. It considers staff as either fixed or variable costs. Treating nurses, physical therapists, and social workers as variable costs requires 631 additional visits to breakeven, rather than 364 visits if they are fixed costs. The document emphasizes that accurately classifying costs as fixed or variable is important for determining the break even point and examines capacity, productivity and staffing levels.

Uploaded by

chatterjee rik
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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a)

Variable costs
Staff auto allowance 40000
Medical & nursing supplies 14800
54800 div

Revenue
110
110x = 684386+8.58x or 101.42x=684386
x
6,748 visits
364 CHC need to increase # of vistis by 364 in order to breakeven

b)
However if we treat nurses, physical therapitss and social works as variable then they need to increase # of vistis by 631

New Variable costs


Staff auto allowance 40,000.00
Medical & nursing supplies 14,800.00
Nurses 105,920.00
social workers 77,000.00
Physical Therapist 90,334.00
328,054.00 div

Revenue
110
110x = 4111326+51.39x or 58.61x=411132
x
7,015 visits
631 CHC need to increase # of vistis by 364 in order to breakeven

Remember - the fact that different combinations of fixed & variable costs yield break even numbers is not a trivila. Takes us to
assumptiomption issues. This is why we need step-function costs incorporated int the anaysis. Then we need to examine capa
the current staffing levels, whether to reduce or improve productivity. Look at the # of staff, days in year, actual vistis per day
campare btween current and potential visits that could be possible

Possible Classification of costs (with info provided)

Fixed Costs
Salaries: Directors, assistant director, contro 165,140.00
Automobile operation and insurance 16,000.00
Purchased Services 4,700.00
Space occupancy costs 34,660.00
Office costs 25,312.00
Other general costs 35,720.00
support staff 73,600.00
Total Fixed costs 355,132.00

Variable Costs
Staff auto allowance 40,000.00
Medical & nursing supplies 14,800.00
54,800.00

Step-function
Nurses 105,920.00
Psychologists 56,000.00
social workers 77,000.00
Physical Therapist 90,334.00
329,254.00
6384 visits $ 8.58

Total costs 739186

Staff auto allowance 40000


Medical & nursing supplies 14800
54800
CHC need to increase # of vistis by 364 in order to breakeven Fixed Costs 684386

l works as variable then they need to increase # of vistis by 631

Total costs 739,186.00

New Variable costs 328,054.00

328,054.00
New Fixed Costs 411,132.00
6384 visits $ 51.39

CHC need to increase # of vistis by 364 in order to breakeven

d & variable costs yield break even numbers is not a trivila. Takes us to
on costs incorporated int the anaysis. Then we need to examine capacity at
e productivity. Look at the # of staff, days in year, actual vistis per day and
be possible

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