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

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

Variable cost per visit$5.00
Annual direct fixed costs$500,000
Annual overhead allocation$50,000 Expected annual utilization10,000
What per-visit price must be set for the service to break even? Toearn an annual profit of $100,000?
Repeat Part a, but assume that the variable cost per visit is $10.
Return to the data given in the problem. Again repeat Part a, but assume that direct fixed costs are $1,000,000.
Repeat Part a assuming both $10 in variable cost and $1,000,000 in direct fixed costs.

 

Reference no: EM13493173

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