View the step-by-step solution to:

The fixed costs directly associated with Springfield's nursing division were estimated to be $9,000 a month for rent and other expenses.

This question was answered on Jan 17, 2013. View the Answer
The fixed costs directly associated with Springfield’s nursing division were estimated to be $9,000 a month for rent and other expenses. The variable costs of supplies (measured on a per-visit basis) were expected to be $30. Mr. Hoover believed that the program could earn revenue of $200 per visit per nurse. Nurses averaged six visits a day.

In terms of personnel, Mr. Hoover saw two options. The first was to hire full time nurses to meet expected demand each month. Each nurse would work a maximum of twenty days per month. His or her monthly salary would be 6,000, regardless of the number of visits actually made during the month.

Assignment

1. Calculate the breakeven point for each option. Why do these breakeven volumes differ?

2. Which option is preferable? Why?

3. Assuming the quarterly data represent the pattern for the upcoming year, how should Mr. Hoover staff the division so as to maximize the VNA’s surplus?

4. What other factors or options should Mr. Hoover consider?





Sign up to view the entire interaction

Top Answer

Also find... View the full answer

Supporting.xlsx

Particulars
Revenue per visit
Less - variable costs
Contribution
Fixed costs
Rent and other expenses
Nurse's salary
Break even no of nurse visits per month
No of nursing visits available per month...

This question was asked on Jan 16, 2013 and answered on Jan 17, 2013.

Recently Asked Questions

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors and customizable flashcards—available anywhere, anytime.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access or to earn money with our Marketplace.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question
  • -

    Flashcards

    Browse existing sets or create your own using our digital flashcard system. A simple yet effective studying tool to help you earn the grade that you want!

    Browse Flashcards