Management 14th Edition by Leslie Rue,Lloyd Byars ,Nabil Ibrahim

تمرين 16

Breaking Even
As of January 1, 2012, UND Family Health Service Center had eight employees with a total annual salary budget of $480,000. The annual maintenance cost was estimated at $96,000. Based on 2012 data, the monthly patient service in 2012 was forecast to be 180 patients per month. For each patient serviced, the average variable cost incurred (e.g., paperwork, treatment materials, equipment depreciation, utility consumption) was estimated at $12, and average revenue per patient was projected to be $275.
1. Based on the above information, do you think the center manager can balance annual costs and annual revenues? Explain. What would you suggest to the manager?
2. If, by implementing more efficient operations management, the center's operating (variable) cost can be reduced to $8 per patient, do you think the center could balance its annual budget?
3. If dismissing employees becomes necessary to balance the budget, how many employees would you recommend be let go? Why?
4. At the end of June 2013, the manager showed you the following report:
What comments would you make to the manager?
Source: This exercise was originally written by Jiaqin Yang, assistant professor, the University of North Dakota.