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Ch.5_In-class Exercise - CVP

Ch.5_In-class Exercise - CVP - In-class Exercise Chapter 5...

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In-class Exercise Chapter 5 CVP (Cost volume profit) Analysis Seattle Grace Hospital plans to invest in a new piece of CT imaging equipment. The hospital estimates that it can bill $1,500 per scan. Preliminary market assessments indicate that demand will be less than 5,000 scans per year. The hospital has the choice between two different types of spiral CT that can fill its imaging needs. Each scanner has a capacity of 5,000 scans per year, but involves a different mix of labor and capital. Scanner A will result in total fixed costs of $1,000,000 per year and would yield a profit of $500,000 if the hospital produced and billed for 5,000 scans. Scanner B will result in total fixed costs of $800,000 per year and would yield a profit of $450,000 per year if the hospital produced and billed for 5,000 scans.
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