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A. Solve for monthly volume

Healthcare Financial Management and Economics

Week 8 Assignment 2 – Oceans Imaging Center

Assignment 2: Break Even Point

Before making hiring or purchasing decisions, healthcare organizations must consider

whether the decision is financially profitable. By calculating break even points,

organizations are able to examine actual costs and make more sound financial

decisions. For this Assignment, you use data from the Oceans Imaging Center and

calculate break even points.

Scenario: Oceans Imaging Center is a small imaging center with two analogue film or

screen units. As the director of the center, Juanita Hernandez has been asked to

determine if it is financially profitable to hire additional technologists to their current staff

of two technologists. She has analyzed the current costs and determined the following:

Reimbursement per screen $130

Equipment lease per month ($11,000 per machine) $22,000

Technologists costs per mammography $34

Technologists aide per mammography $21

Variable cost per mammography $12

Equipment maintenance per month per machine $10,000

To prepare for the Assignment:

Examine the Oceans Imaging Center scenario. Reflect on how you will use the provided

financial data to calculate break even points. Refer to Chapter 9 of Financial

management of health care organizations: An introduction to fundamental tools,

concepts and applications for additional guidance.

The Assignment:

Given the above information, create an Excel spreadsheet showing the following:

A. Solve for monthly volume to break even.

B. Solve for monthly volume needed to break-even at desired $5000 per month

profit level.

C. Solve for volume needed to break-even at new reimbursement per screen of $55

and no profit.

D. Solve for volume needed to break-even with additional labor.

Your Assignment is due by Day 7 of Week 8.

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