3384 Words14 Pages
BRIDGESTONE BEHAVIORAL HEALTH CENTER: COST-VOLUME-PROFIT ANALYSIS FOR PLANNING AND CONTROL I. INTRODUCTION Bridgestone Behavioral Health Center, a medical center for comprehensive outpatient substance abuse treatment center positioned at the Midwest United States and has been operating since 1985. Some of the services offered by Bridgestone grouped generally are counselling, crisis intervention, detoxification and methadone maintenance. Under these services they offer patient assessment, lab urinalysis, case management, group counseling, individual counseling, crisis intervention, intensive outpatient, medical somatic, methadone maintenance and ambulatory detoxification totaling to 10 services. Operations of the…show more content…
If management can increase their WACM, their goal will be easier to achieve. The best way to increase their WACM is to decrease their variable costs. This is because increasing the price of their services might lead to a decrease in their number of customers. A high WACM also means that every revenue that Bridgestone earns will have a large impact on the coverage of their fixed expenses. The next thing that needs to be analyzed about the annual budget of Bridgestone for next year would be the break-even point. As discussed, break-even point is the point where the revenues and expenses are equal and thus, will have a zero profit. To put it simply, companies should always set their budgeted volume of sales above the break-even point if they want to be profitable. And they should also do their best to meet the break-even point because if the volume of sales is less than the break-even point, companies are sure to experiences losses which might affect the entire company and its employees. The break-even point can be expressed in two ways. It can be expressed in terms of units, and it can be expressed in terms of sales amount. The formula for the break-even point expressed in units is as follows: BREAK-EVEN POINT (IN UNITS) = FIXED EXPENSES/ UNIT CM BREAK-EVEN POINT (IN UNITS) = $3493700/(3500000/75150) BREAK-EVEN POINT (IN UNITS) = 75,015 UNITS In terms of break-even
Get Access