Use the Information Below to Answer the Following Question(s)

question 154

Multiple Choice

Use the information below to answer the following question(s) .The following information is for Winnie Company:

-A hospital receives $1,000,000 monthly in funding from various sources.Annual fixed costs are projected to be $5,000,000 and the variable cost per patient, across all departments is projected to be $534.80.Last year they treated 11,500 patients.The hospital expects a 5% increase in patients this year.A governing bylaw requires that the hospital be run as a non-profit organization.What is the maximum number of patients the hospital can expect to be able to treat assuming the operating income is zero?

• A)11,500
• B)12,079
• C)13,000
• D)more than 13,000
• E)CVP analysis is not relevant for non-profit organizations.

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Definitions:

Marginal Costs

The increase in total production cost that comes from making or producing one additional unit.

Average Total Costs

The cost per unit of output, calculated by dividing the total cost by the quantity of output produced.

Technological Change

The process of innovation and development of new methods, products, or processes, driving efficiency and economic growth.

Fixed Costs

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance, making them consistent regardless of business activity levels.