Healthcare Finance
4-33. A Greener World expects to have $15,000 in fixed costs. If its fixed costs do not change but the amount each marcher raises through pledges declines from $55 to $50 and its variable cost/unit increases from $25 to $30, how much will its break even quantity increase?
4-34. The Helensville Symphony incurs $3,000,000 of fixed costs each year. The variable cost for each person attending one of the orchestra’s performances is $24. If the average charge for a ticket to attend a performance of the Helensville Symphony is $100, how many tickets must it sell each year to break even?
4-35. Millbridge Family Services (MFS) currently operates a foster care program that is fully funded by the state. Changing government priorities are expected to result in a 20% reduction in its state foster care funding for the upcoming fiscal year. MFS’s management is considering eliminating the foster care program in the next fiscal year in light of these anticipated funding cuts. The total foster care program expenses for the upcoming fiscal year is $120,000. The foster care program’s budgeted expenses include $25,000 of salaries and occupancy costs that are allocated to its program budget from MFS central administration. These allocated expenses of $25,000 are unavoidable even if the foster care program is eliminated. What is the total relevant cost that should be considered in making this decision?
