menu
bartleby
search
close search
Hit Return to see all results

With the population aging and patients who dread sitting in asterile dental office, dentists are finding an opportunity in dentalhouse calls. The Blende Dental Group has taken its service onthe road in San Francisco and New York City, performing everything from routine exams and cleanings to root canals. Some patients are wealthy and prefer the personal service, whereas othersare elderly homebounds who cannot get out to the dentist’soffice. Recreating a dental office in a home requires additionalequipment, such as a portable X-ray machine that looks like aray gun, sterile water tanks, a dental drill, lights, and a laptop. Aportable X-ray machine alone costs $8,000. Refer to Appendix3: Marketing by the Numbers to answer the following questions.1. What types of fixed costs are associated with this service?2. Assuming fixed costs of adding this mobileservice will increase by $20,000 and a desired contribution margin of 40 percent, determine the amount ofsales necessary to break even on this increase in fixedcosts to offer this additional service.3.  What other factors must a dentist consider before offering this service in addition to his or her in- officeservice?

Question

With the population aging and patients who dread sitting in a
sterile dental office, dentists are finding an opportunity in dental
house calls. The Blende Dental Group has taken its service on
the road in San Francisco and New York City, performing everything from routine exams and cleanings to root canals. Some patients are wealthy and prefer the personal service, whereas others
are elderly homebounds who cannot get out to the dentist’s
office. Recreating a dental office in a home requires additional
equipment, such as a portable X-ray machine that looks like a
ray gun, sterile water tanks, a dental drill, lights, and a laptop. A
portable X-ray machine alone costs $8,000. Refer to Appendix
3: Marketing by the Numbers to answer the following questions.


1. What types of fixed costs are associated with this service?

2. Assuming fixed costs of adding this mobile
service will increase by $20,000 and a desired contribution margin of 40 percent, determine the amount of
sales necessary to break even on this increase in fixed
costs to offer this additional service.
3.  What other factors must a dentist consider before offering this service in addition to his or her in- office
service? 

check_circleAnswer
Step 1

1.

The types of fixed costs that are related with this service are,

  • Insurance – This may be partially essential based on the clinics requirements.
  • Salary – The salaries are provided for employees who work here.
  • Equipment – The equipment costs such as ray gun, sterile water tanks, a dental drill, lights, and a laptop.
Step 2

2.

Calculation of Amount of Sales:

The amount of sales is $50,000.

...
Amount of SalesIncreasein Fixed Costs
Contribution M argin
$20,000
40%
- $50,000
help_outline

Image Transcriptionclose

Amount of SalesIncreasein Fixed Costs Contribution M argin $20,000 40% - $50,000

fullscreen

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Our solutions are written by experts, many with advanced degrees, and available 24/7

See Solution
Tagged in

Business

Finance

Market Efficiency

Related Finance Q&A

Find answers to questions asked by student like you

Show more Q&A add
question_answer

Q: The corporate valuation model, the price-to-earnings (P/E) multiple approach, and the economic value...

A: Calculate the free cash flows as follows:

question_answer

Q: A loan is offered with monthly payments and a 14.50 percent APR. What’s the loan’s effective annual ...

A: Calculate the effective annual rate (EAR) as follows:

question_answer

Q: Curly's Life Insurance Co. is trying to sell you an investment policy that will pay you and your hei...

A: Present value of a perpetuity P at an interest rate of r = P / r

question_answer

Q: The company stock increases dividend by 5% each year and the expecteddividend in 5 years is $5. Anal...

A: Suppose the dividend paid recently=$xDividend paid in year 1=x*(1+growth rate)^1Dividend paid in yea...

question_answer

Q: What are the basic arguments for increasing capital requirements at large commercial banks? In what ...

A: The primary argument is that the risk is lesser if the bank increases its capital. In other words im...

question_answer

Q: For corporations, maximizing the value of owner's equity can also be stated as Multiple Choice m...

A: Owner's equity:The owner's equity could be stated as "a part of the overall value of the firm's asse...

question_answer

Q: Leonatti Labs’ year-end price on its common stock is $22. The firm has a profit margin of 12 percent...

A: Price, P = $ 22Profit margin = Net income / Sales = 12%Total Assets = $ 35 millionTotal Assets turno...

question_answer

Q: Oakdale Fashions, Inc.’s, 2021 income statement is reported below. (Use corporate tax rate of 21 per...

A: Calculate the tax liability for 2021:The tax liability for 2021 is $34,839.

question_answer

Q: Suppose that you save for retirement by contributing the same amount each month from your 23 rd birt...

A: Monthly saving (pmt) = $100Rate of Return (rate) = 7.5% or 0.075Type of Compounding = MonthlyNumber ...

Sorry about that. What wasn’t helpful?