# Case study 2 involves breakeven analysis and variance analysis for a skilled nursing facility. (Vari 1 answer below »

Case study 2 involves breakeven analysis and variance analysis for a skilled nursing facility. (Variance analysis is covered in Week 8.) Be sure to show your work.Use the information in the table below to answer questions 1 and 2. Your skilled nursing facility defines output as a patient day. Its present volume is 26,000 patient days. The average cost per day is $90.00. Present revenues and costs are shown below:Revenues:Charge Patients (6,000 Patient Days) $750,000Fixed-Price Patients (20,000 Patient Days) 1,800,000Total Net Revenues 2,550,000Costs:Fixed Costs Fixed Costs $1,170,000Variable Costs ($45/PD) 1,170,000Total ($90/PD) $2,340,000Net Income $210,0001. What is the breakeven in patient days, assuming no profit is required?2. If volume goes up 10 percent to 28,600 patient days and the payer mix is unchanged, what will net income be?Use the following information to answer questions 3 through 7.Standard Cost ProfileLab Treatment SU #12Expected Treatments = 1,000Quantity Quantity Unit Variable Average AverageResource Variable Fixed Cost Cost Fixed Cost Total CostLabor 0.80 0.80 $16.00 $12.80 $12.80 $25.60Supplies 7.00 0 1.10 7.70 0 7.70$20.50 $12.80 $33.30Actual Month CostLab Treatment SU #12Actual Treatments = 1,100Quantity Unit TotalResource Used Cost CostLabor 1,600 $17.00 $27,200Supplies 7,500 1.00 7,500$34,700For questions 3 through 7, calculate:3. Efficiency Variance—Labor4. Efficiency Variance—Supplies5. Price Variance—Labor6. Price Variance—Supplies7. Volume Variance