GETWELL CLINICS BREAKEVEN ANALYSIS Analyzing Break-Even Points and Dealing with Practice Constraints INSTRUCTIONS: FILL IN THE YELLOW HIGHLIGHTED AREAS • Explain the relevance of Diagnosis Related Groups (DRG) analysis as a tool that drives costs and affects management decisions in health care. Diagnosis Related Groups is a system that categorized patients into specific groups based
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Question: Undeniably‚ breaking even is not the ultimate goal of firms. Why then bother about the break-even analysis? THE IMPORTANT OF BREAK-EVEN ANALYSIS It is an undisputable fact that every business’ objective is to survive and make profit as compensation of being in existence. Frankly‚ predicting a precise amount of sales or profits is nearly impossible. No business aims at making losses whatsoever. Given this‚ a person starting a new business often asks‚ ‘’ At what level of sales will my
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#3 Break-Even Analysis Rob Holland Assistant Extension Specialist Agricultural Development Center September 1998 One of the most common tools used in evaluating the economic feasibility of a new enterprise or product is the break-even analysis. The break-even point is the point at which revenue is exactly equal to costs. At this point‚ no profit is made and no losses are incurred. The break-even point can be expressed in terms of unit sales or dollar sales. That is‚ the break-even units
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is based on the extremely high quality and performance of the products. By cutting price‚ Jones Blair will be able to stay competitive in price with other the other products on the market. In 1997 architectural product sales volume was $12‚000‚000. Jones Blair has a current net profit of $1.14 million‚ and to stay profitable it must maintain this amount. $12‚000‚000*.35= $4‚200‚000 If Jones Blair reduced its price by 20% the contribution margin will drop to 15%. New contribution margin
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PRACTICE QUESTIONS ON BREAK-EVEN ANALYSIS 1. A small firm intends to increase the capacity of a bottleneck operation by adding a new machine. Two alternatives‚ A and B‚ have been identified and the associated costs and revenues have been estimated. Annual fixed costs would be $40‚000 for A and $30‚000 for B; variable costs per unit would be $10 for A and $12 for B; and revenue per unit would be $15 for A and $16 for B. a) Determine each alternative’s break-even point in units. b) At what volume of
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Background and Problem definition: Jones-Blair is privately held corporation which produces architectural paint coatings and markets them under Jones Blair brand name. Addition to that it also sells paint sundries under Jones Blair brand name even though these items are not manufactured by them. Apart from these the corporation also operates on OEM coating division. The problem in front of the company is to decide where and how to deploy corporate marketing efforts among the various architectural
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October 2012 Jones Blair Case Study Jones Blair Company is a paint manufacturer that distributes paint to Texas‚ Oklahoma‚ New Mexico‚ and Louisiana with its manufacturing plant based in Dallas-Fort Worth (DFW). The main product line of the company is architectural paint with some line depth that they manufacture at their own plant; they also offer the sundries for painting towards their end customers. The sundries offered are not produced by the company itself but carries the Jones Blair brand logo
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BREAK-EVEN POINT A company’s break-even point is the amount of sales or revenues that it must generate in order to equal its expenses. In other words‚ it is the point at which the company neither makes a profit nor suffers a loss. Calculating the break-even point (through break-even analysis) can provide a simple‚ yet powerful quantitative tool for managers. In its simplest form‚ break-even analysis provides insight into whether or not revenue from a product or service has the ability to
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The case describes the competition in U.S. paint industry and also about Jones Blair Company which deals in architectural paint and paint sundries. The problem definition in the case study depicts a meeting of company executives where discussions are made that how to deploy corporate marketing efforts of the company in order to increase the sales‚ as peak painting season is approaching soon. Market and Industry Analysis Paint Industry: The industry is divided into three segments: original equipment
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CVP ANALYSIS / BREAK EVEN ANALYSIS Break-Even Analysis Introduction Break-Even Analysis-Volume-Analysis is a systematic method of examining the relationship between changes in volume (that is output) and changes in Sales Revenue‚ Express and Net Profit. As a model of these relationships‚ Break-Even Analysis simpifies the real-world conditions which a firm will face. The objective of Break-Even Analysis is to establish what will happen to the financial results if a specified level of activity
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