Accounting help – Break Even
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Using the example below, calculate the break even for the number of procedures. Use an electronic spreadsheet to show how you computed the break even and embed the spreadsheet in your paper. Discuss the impact of the various reimbursements (e.g., Medicare, Medicaid, private, or self-pay).
We recently purchased an endoscopic ultrasound (EUS), which allows doctors to examine the linings of the esophagus and stomach, as well as the walls of the gastrointestinal tract. It is a necessary, but expensive, piece of equipment, which cost us $20,000 ($11,000 to purchase, plus $9,000 for renovations). Our fixed costs are four full-time equivalent employees at $336,000. Medicare payments are $885 per procedure, and each procedure requires $175 in average variable costs. It has been estimated that we will complete 500 procedures in the first year and 850 procedures in years 2 to 5.
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