Triangle Pediatrics currently provides 1,000 visits per year at a price of $50 per visit. The variable cost per visit (variable cost rate) is $30, and total fixed costs are $15,000. The business manag

a. Base Case Projected P&L Statement: Revenue: 1,000 visits x $50 per visit = $50,000 Variable Costs: 1,000 visits x $30 variable cost rate = $30,000 Fixed Costs: $15,000 Profit: Revenue - Variable Costs - Fixed Costs = $5,000 Projected P&L Statement Incorporating Proposed Changes: Revenue: 1,200 visits x $45 per visit = $54,000 Variable Costs: 1,200 visits x $30 variable cost rate = $36,000 Fixed Costs: $20,000 ($15,000 original fixed costs + $5,000 increased advertising budget) Profit: Revenue - Variable Costs - Fixed Costs = ($2,000) Based on the projected P&L statements, Triangle Pediatrics should not make the suggested changes as they would result in a loss of $2,000. b. To break even with the proposed changes, Triangle Pediatrics would need to generate a profit of $0. This can be achieved by setting the profit equation to 0 and solving for the required number of visits: $45x - $30x - $20,000 = 0 $15x = $20,000 x = 1,333.33 visits Therefore, Triangle Pediatrics would need to increase their visit volume to 1,333 visits per year in order to break even with the proposed changes.