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A hospital receives $1,000,000 monthly in funding from various sources. Annual fixed costs are ...

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A hospital receives $1,000,000 monthly in funding from various sources. Annual fixed costs are ...

A hospital receives $1,000,000 monthly in funding from various sources. Annual fixed costs are projected to be $5,000,000 and the variable cost per patient, across all departments is projected to be $534.80. Last year they treated 11,500 patients. The hospital expects a 5% increase in patients this year. A governing bylaw requires that the hospital be run as a non-profit organization.
What is the maximum number of patients the hospital can expect to be able to treat assuming the operating income is zero?
A) 11,500
B) 12,079
C) 13,000
D) more than 13,000
E) CVP analysis is not relevant for non-profit organizations.

Textbook

Cost Accounting: A Managerial Emphasis, Canadian Edition

Edition: 7^th

Authors: Horngren, Datar, Rajan, Beaubien

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