Carlsbad home care - Accounting solution PDF

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Accounting solution...

Description

Carlsbad home care

1. Identify the fixed and variable costs. Fixed Costs Salaries: Directors, assistant director, controller, Automobile operation and insurance Purchased Services Space occupancy costs Office costs Other general costs support staf Total Fixed costs

165140 16000 4700 34660 25312 35720 73600 355132

2. What is the breakeven point? Break Even =

Per Exhibit 1 Fixed Costs Sales price per visit - Variable Cost p Visit $355,132 (($115.79 - ($384,054/6384 $355,132 $115.79 - $60.16 $6,383.82

3. What assumptions were necessary in answering questions 1 and 2? Variable costs include the "medically related salaries", the medical and nursing supplies, and the staf automobile allow All other salaries and costs are fixed costs The breakeven point is the company's revenue of $110/$115.79 per visit equaling the total cost of the expenses gener

Contribution Ratio/Margin Contribution/ Sales

0.48044879

Margin Of safety:Breakeven point Exhibit 1 = 6383.2*115 = 734068

$ 5,135.36 $ (44,595.04)

As per reading = 7125.44*110 = 783798.4...