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Chris Heaton

Chris Heaton - Chris Heaton Finite Math Project 1 Hospital...

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Chris Heaton Finite Math 6/8/2009 Project 1 Hospital Administration 1. a.)Total Fixed Costs - \$180,000(electricity, heat…) + \$270,000(salaries) = \$450,000 b.)Total Variable Costs – \$ 380(cost per surgery) + \$15(flowers)+\$20(.25) (glasses for ¼ of patients) = \$400x c.)C(x) = 400x + 450,000 R(x) = 1000x P(x) = 600x – 450,000 2. R(x) – C(x) 1000x – 400x – 450,000 600x – 450,000 -600 X= 750 In order to break even Southwest Hospital will need to perform 750 eye surgeries per year. This averages out to 62.5 surgeries per month. 3. Without Machine – P(x)=600(70x12)-450,000. Profit is \$54,000 With Machine – P(x)=650(70x12)-500,000. Profit is \$46,000 The profit would be \$8,000 greater if Southwest Hospital does not lease the machine. I would advice the hospital to continue business as normal and not lease this machine. At this point the costs outweigh the benefits. 4. \$10,000(dollars per month) x 12(months) = \$120,000 per year. 70(surgeries per month)+40(additional surgeries per month)= 110 Plug them into my new equation 600(110 x 12) – 570,000 = \$222,000 With the new advertising company we should expect profits to increase to a total of

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