Determining charges for private pay residents shady rest nursing has 100 residents

Determining charges for private pay residents shady rest nursing has 100 residents. The administrator is concerned about balancing the ratio of its private pay to non-private pay patients. Non-private pay sources reimburse an average of $150 per day whereas private pay residents pay on average 100 percent of full daily charges. The administrator estimates that variable cost per resident per day is $50 for supplies, food, and contracted services, and annul fixed cost are $ 4,562,500.

What is the daily contribution margin of each non-private pay resident?

If 25 percent of the residents are non-private pay, what will shady rest charge the private pay patients to break even?

What If non-private pay payers cover 50 percent of the residents

The owner of shady rest nursing home insists that the facility earn $80,000 in annual profits. How much must the administrator raise the per day charge for the privately insured residents if 25 percent of the residents are covered by non-private pay payers?


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