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CASE6 CASE 6 Student Version by FACHE COLUMBIA MEMORIAL HOSPITAL Breakeven Analysis This case illustrates the use of breakeven analysis to help make operating decisions. Note that the model extends out to Column AR. The model consists of a complete base case analysis--no changes need to be made to the existing MODEL-GENERATED DATA section. However, all relevant values in the INPUT DATA section of the student version have been replaced with zeros. Thus, students must determine the appropriate input values and enter them into the model.

These cells are colored red. When this is done, any error cells will be corrected and the base case solution will appear. Note that the model does not contain any risk analyses, so students will have to create their own if required by the case. Furthermore, students must create their own graphics (charts) if needed to supplement those included with this model. The instructor version of the model contains three graph sheets.

Figure 1 plots total monthly revenue, total monthly costs, and total monthly profit versus number of incremental visits without the new marketing program. Figure 2 plots the same information with the new marketing program, and Figure 3 contains the incremental marketing program plot. INPUT DATA: Historical Financial Data: Monthly Averages CY 2009 Jan 2010 Feb Jan/Feb10 Combined Number of visits 14,,,,,,230 Net revenue 8,747 ,028 ,748 ,729 ,888 ,037 Salaries and wages 4,250 ,540 ,544 ,854 ,542 ,952 Physicians fees 192,,,,,,286 Malpractice insurance 31,,,,,,705 Travel and education 5, General insurance 8, Subscriptions Electricity 11,,,, Water 1, Equipment rental 1, Building lease 155,,,,,,910 Other operating expenses 103,,,,,,561 Total operating expenses 5,220 ,152 ,966 ,435 ,059 ,810 Net profit (loss) (6,473) (