1. You are considering starting a walk-in clinic. Your financial projections for the first year of operations are as follows:
Number of visits 10,000
Wages and benefits $220,000
Rent $5,000
Depreciation $30,000
Utilities $2,500
Medical supplies $50,000
Administrative supplies $10,000
Assume that all costs are fixed except supply costs, which are variable.
a. What is the clinic’s underlying cost structure?
b. What are the clinic’s expected total costs?
c. What are the clinic’s estimated total costs at 7,500 visits? At 12,000 visits?
d. What is the average cost per visit at 7,500, 10,000, and 12,500 visits?
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