Breakeven Analysis: How Many Patient Days Does Palm Bay Hospital Need?

To find the breakeven volume, we need to determine the number of patient days required to cover the fixed costs.

Breakeven volume = Fixed costs / Contribution margin per unit

The contribution margin per unit is the difference between the revenue per inpatient day and the variable cost per inpatient day.

Contribution margin per unit = Revenue per inpatient day - Variable cost per inpatient day

Contribution margin per unit = $1,200 - $400 = $800

Breakeven volume = $10,000,000 / $800 = 12,500 patient days

Therefore, the breakeven volume is 12,500 patient days.