Healthcare Financial Management and Economics

Healthcare Financial Management and Economics
Week 8 Assignment 2 — Pacific Imaging Center
Assignment 2: Break-Even Point Formulas
Before making hiring or purchasing decisions, healthcare organizations must consider
whether the decision is financially profitable. By calculating break-even points,
organizations are able to examine actual costs and make more sound financial
decisions. For this Assignment, you use data from the Pacific Imaging Center and
calculate break-even points.
Scenario: Pacific Imaging Center is a small imaging center with two analogue film or
screen units. As the director of the center, Juanita Hernandez has been asked to
determine if it is financially profitable to hire additional technologists to their current staff
of two technologists. She has analyzed the current costs and determined the following:
Reimbursement per screen
Equipment costs per month ($800 per machine)
Technologists costs per mammography
Technologists aide per mammography
Variable cost per mammography
Equipment maintenance per month per machine

$75
$1,600
$20
$4
$10
$700

To prepare for the Assignment:
Examine the Pacific Imaging Center scenario. Reflect on how you will use the provided
financial data to calculate break-even points. Refer to Chapter 9 of Financial
Management of Health Care Organizations: An Introduction to Fundamental Tools,
Concepts and Applications for additional guidance.
The Assignment:
Given the above information, create an Excel spreadsheet showing the following:
A. Solve for monthly volume to break even.
B. Solve for monthly volume needed to break even at desired $5,000 per month
profit level.
C. Solve for volume needed to break even at new reimbursement of $55 per screen
and no profit.
D. Solve for volume needed to break even with additional labor.
Your Assignment is due by Day 7 of Week 8.

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