Break-Even Analysis 1
BREAK-EVEN
ANALYSIS
(Case Study)
NR533-10716:
FINANCIAL MANAGEMENT
IN HEALTHCARE
ORGANIZATIONS
, Break-Even Analysis 2
1. 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?
My approach to this case study would be first to identify the fixed costs cost and variable
costs in the company and then combines both the costs into one total cost line (Harding, 2017).
The breakeven point occurs when the line of the total cost intersects with the line representing
the company’s revenue. Secondly, I would focus on profit contribution by the company which
simply is a per-unit measure of profit on the number of visits to be performed.
Break-even analysis is a financial calculation that is to determine the number of products
and services that are required to sell to get the cost that will be incurred by the business. Before
the calculation of the break-even analysis, one should know the average per-unit sales price (per
unit revenue). According to a break-even point analysis is a measurement system that calculates
the margin of safety by comparing the number of revenues or units that must be sold to cover
fixed and variable costs associated with making the sales (Chu et al., 2017). In other words, it’s
a way to calculate when a project will be profitable by equating its total revenues with its total
expenses.
2. Perform the calculations needed for the break-even analysis. Show your work, formulas
used, and reference the formula. When calculating the patient visits per day, round to the
nearest whole. After you’ve completed the calculations, record your results in the
appropriate place in the table
Break-even Analysis Data Table
Acuity Percentage Charge Visits Charges per Visits Charges per Contribution
Category % per Visit per Year per Day Margin
Year Day
Simple 20% $2000 1496 $2,992,000 5 $10,000 $7,500
BREAK-EVEN
ANALYSIS
(Case Study)
NR533-10716:
FINANCIAL MANAGEMENT
IN HEALTHCARE
ORGANIZATIONS
, Break-Even Analysis 2
1. 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?
My approach to this case study would be first to identify the fixed costs cost and variable
costs in the company and then combines both the costs into one total cost line (Harding, 2017).
The breakeven point occurs when the line of the total cost intersects with the line representing
the company’s revenue. Secondly, I would focus on profit contribution by the company which
simply is a per-unit measure of profit on the number of visits to be performed.
Break-even analysis is a financial calculation that is to determine the number of products
and services that are required to sell to get the cost that will be incurred by the business. Before
the calculation of the break-even analysis, one should know the average per-unit sales price (per
unit revenue). According to a break-even point analysis is a measurement system that calculates
the margin of safety by comparing the number of revenues or units that must be sold to cover
fixed and variable costs associated with making the sales (Chu et al., 2017). In other words, it’s
a way to calculate when a project will be profitable by equating its total revenues with its total
expenses.
2. Perform the calculations needed for the break-even analysis. Show your work, formulas
used, and reference the formula. When calculating the patient visits per day, round to the
nearest whole. After you’ve completed the calculations, record your results in the
appropriate place in the table
Break-even Analysis Data Table
Acuity Percentage Charge Visits Charges per Visits Charges per Contribution
Category % per Visit per Year per Day Margin
Year Day
Simple 20% $2000 1496 $2,992,000 5 $10,000 $7,500
