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You are considering starting a walk-in clinic. Your financial projections for the first year of operations are below. Revenue and variable costs are based on the projected number of visits. Medical and administrative supplies are variable costs; all other costs are fixed costs. Medical and administrative supplies are variable costs; all other costs are fixed costs.
Projected Visits 15,000
Revenues $750,000
Wages & benefits 300,000
Rent 15,000
Depreciation 40,000
Utilities 7,500
Medical supplies 65,000
Administrative supplies 12,000
Required:
a. What is the total contribution margin?
b. What is the contribution margin rate (rounded to the nearest dollar)?
c. What is the clinic's breakeven point?
d. What is the economic breakeven for a profit of $100,000?
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Answers: 3
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