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Can you explain why the fixed cost is $85,500 and the variable cost is $2485.42 please?

Solution 10 The value of the da Vinci at the end of the lease will be $500,000 Fixed cost is $85,500 per month, variable cost is $2485.42per case Discount rate = 12% Comments Average cases per month Average Revenue per case Salvage Value Revenue 1 2 3 4 20 20 20 20 6500 6500 6500 6500 500000 1,560,000.00 1,560,000.00 1,560,000.00 2,060,000.00 -20'6500 12 Fixed costs 1,026,000.00 1,026,000.00 026,000.00 1,026,000.00 Variable costs 596,500.80 596,500.80 596,500.80 596,50080 -2485 42 2012 Lease payment 694,28138 694,28138 694.28138 694,28138 -57856.78 12 Total Costs 2,316,782,18 2,316,782.18 2,316,782,18 2,316,782.18 Fixed Costs + Variable Costs + Lease Expenses Net Income (756,782.18) (756,782.18) (756,782.18) (256,782.18) Revenue - Total Costs Year Net Income PV PV 1 (756,78218) (756,78218/(1+12%) ($675,69838) 2 (756,78218) (756,782.187/(1+12% ($603.30212) 3 (756.782 18) (756,78218)/(1+12% ($638,66261) 4 (256,78218) (256,78218//(1-12%) ($163,18972) Total PV ($1,980,852.83) The PV of Inflows - ($1,980,85283) NPV = PV of Inflows - PV of Outflow- (1,980,852.83) - 0 - (1,980,852.83) (+r" EMI - Pr*(1+1)1 Operating Expenses Salaries and Wages Employee Benefits Supply Expense - da Vinci Supply Expense - Other Lease Expense Maintenance Expense Depreciation Expense Allocated Hospital Expenses $ 9,500.00 $ 3,325.00 $ 20,000.00 $ 5,000.00 $ 62,000.00 $ 14,000.00 $ 1,500.00 $10,000.00 $ 125,325.00 Table 4 Average Cases Per Month Average Revenue per case $ 12 6,500.00 As part of the overall discussion concerning the da Vinci surgical system, management is contemplating the new technological advances in the system as well as the fact that the existing lease is ending. Given the situation, management is evaluating the current number of procedures, an expansion of the robotic surgical system with addition of an additional surgeon, and the lease for a new system. Page 6 of 8 Table 5 $ 2,500,000.00 5.25% New Robot Cost Cost of Financing Lease Term (Years) Average Cases Per Month Average Revenue per case 6,500.00

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