What per visit price must be set for service to break even

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Reference no: EM131495539

1. Assume that the managers of Fort Winton Hospitals are setting the price on a new outpatient service. Here are the relevant data estimates:

Variable cost per visit $5.00

Annual direct fixed costs $500,000

Annual overhead allocation $50,000

Expected annual utilization 10,000 visits

a. What per visit price must be set for the service to break even?? To earn an annual profit of $100,000 (2.5 points).

b. Repeat Question a, but assume that the variable cost per visit is $10 (2.5 points).

c. Return to the data given in the problem. Again repeat question1, but assume that direct fixed costs are $1,000,000 (2.5 points).

d. Repeat Question a assuming both a $10 variable cost and 1,000,000 indirect fixed costs.

Reference no: EM131495539

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