Finance:

This new to me. This class utilizes a lot of the basics of accounting which I've never been taught before. I'm going to college online and trying to learn this by myself. This is the only class like this I have to take. B.S.H.S is my is my degree. Health sciences is my major. I need to tutor to help me understand what I'm doing right versus what I'm doing wrong. This was a homework assignment. I will now have to utilize this assignment to do an essay(four pages) on what I've learned.

PLEASE HELP....

I definitely need to finance hero to help me with this class. I don't know what I'm doing right versus what I'm doing wrong. Your help would be greatly appreciated!

Thank You....

 

I need some help In 2013, the Gastroenterology Clinic of Pearland Medical Center had revenue totaling $14,550,400. The Gastroenterology Clinic costs data for a 12-month period from January 2013 through December 2013 were reported as follows:

Month,  2013         

                         Number of Patient Visits                Clinic Costs, $

 January                         6,755                                    945,700

 February                       6,620                                     946,660         March                           5,834                                     880,934

 April                              6,228                                     927,972

 May                              7,554                                      944,250

 June                             7,620                                      914,400

 July                              7,136                                      949,088

 August                         7,440                                      959,760

 September                   6,453                                      942,138

 October                        5,325                                      825,375

 November                    5,588                                      854,964

 December                    7,020                                      961,740

 

1.Find the fixed and variable portion of costs using the high-low method.

The fixed portion of cost using the high low method for the   year was $7,425,768.

 

The variable portion using the high low method between the month of June and October was $89,025.

 

The variable costs for the year were $7,124,632.

 

                                             Patient visits                     Clinic cost $

 

High month

(June,2013)                              7620                               $914,400

 

Low month

(Oct,2013)                                5325                               $825,375

                                            ---------------------------------------------------

                                                 2295                          $89,025  (VC)

 

2295 divided 89,025 = $38.7908 (per visit and variable costs)

High month (June) FC = TC - (VCu  x Q)  

                               914,400 - (38.7908 x 7620u) = 295,585.89

TC = 914,400 - 295,586 = $618,814 x 12 months = $7,425,768

 

FC Annually

TC - FC  $14,550,400 $-7,425,768 = $7,124,632= VC annually

 

2.Calculate the contribution margin, the contribution margin ratio, and the per-visit revenue, costs, and operating income.

 

Contribution margin:

Net revenue - VC = contribution margin

$14,550,400. - $7,124,632 = $7,425,768 is the contribution margin.

Contribution margin ratio:

$0.51 of every dollar is available to pay fixed expenses (0.510348031),

 

Revenue per visit:

Total visits per year 79,573 divided into VC of $7,124,632 = $182.91 per visit.

 

Costs:

FC = $7,425,768

VC = $7,124,632

Total costs = $14,555,400

 

Operating Income:

Total revenue $14,550,400

Less VC of $7,124,632 plus less FC of $7,425,768 = 0 profit, and 0 operating costs

 

3.Discuss the importance of computation of the contribution margin in evaluating the relationship of cost, volume, and profit.

 

Contribution margin and its relationship between cost, volume, and profit:

The contribution margin is the breakeven point in sales. The contribution margin determines at what cost and volume the product being sold needs to be at to breakeven and then start making a profit. The contribution margin is an indicator of where losses stop and profitability begins. The further beyond the contribution margin the greater the profitability. Intern meaning increased volume of sales due to the products being set at the right cost

Deciding to continue (or to discontinue) a service, which revenues currently do not cover total cost, which is more important in the short run, variable cost or fixed cost? In the long run (with more service volume)? Why?

Deciding to continue or discontinue a service that isn't currently covering the total costs is more important in the long run than in the short run. This is because deciding to continue or discontinue a service that is not being profitable long-term means a loss of a significant amount of revenue to a business. Whereas deciding to discontinue or continue service in the short term simply means the business is either profitable or if not profitable at that moment the service may be discontinued temporarily until market changes or variable cost decrease to ensure profitability. Losses short-term are much less significant than losses long-term. In the short term fixed costs are more important because in order to put a business on hold for a short period of time for the market to change the variable costs mostly stop whereas the fixed costs must be paid during the time of pause. Large amounts of fixed costs while putting a a business on hold   can mean significant losses over a short period time. Whereas in the long run variable costs with more service volume is much more important because unexpected  increased variable costs while producing a lot of service volume can greatly affect a company's bottom line leading to very  substantial losses,