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Good afternoon sir,
I’m doing part c on stow health centre question, I’m a bit confused as to how they got the contribution?
Where on earth did you find this question? It is incredibly old 🙂 🙂
The expected variable cost per day is (0.1 x 95) + (0.6 x 85) + (0.3 x 70) = $81.50.
If the client fee is $180 per day, then the contribution is 180 – 81.50 = $98.50 per day.
So the total contribution per year is 90% (occupancy) x 50 (clients) x 350 (days) x $98.50 (contribution per day) = $1,551,375
It is the same workings for each of the others 🙂
Thanks so much for this sir.
Just out of curiosity are the old questions not worth doing? I found these questions at the back of the BPP study text…
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