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

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Reference no: EM131613983

The Managers of Bronco General Hospital are setting the price of a new outpatient service. Here are relevant data estimates:

Variable cost per visit $6.25

Annual direct fixed costs $600,000

Annual overhead allocation $60,000 Expected annual utilization 15,500 visits.

Round your answers to the nearest whole dollar!

a) What per visit price must be set for the service to break even? To earn an annual profit of $10,000

b) Repeat part a, but assume that the variable cost per visit is $11.00

c) Repeat part a, but assume that direct fixed costs are $1,000,000.

d) Repeat part a assuming both a $11 variable cost and 1,000,000 direct fixed cost.

Reference no: EM131613983

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