HEALTH CARE SERVICES REIMBURSEMENT
Pearland Medical Center’s base case pro forma profit and loss statement
Total revenues = $150 x 20,000 $3,000,000
Total variable costs = ($45 x 20,000)x2 $1,800,000
Total contribution margin = $1,200,000
Fixed costs $1,150,000
Profit (net income) $50,000
What is the clinic’s contribution margin on the contract?
From above pro forma profit and loss statement, the total contribution margin is $1,200,000
What is the clinic’s contribution margin on the contract?
