What per visit price must be set for service to breakeven

Assignment Help Financial Management

Reference no: EM131935614

Assume that managers at good hospital are setting the price on a new outpatient service.

Here are relevant data estimates:

Variable cost per visit $48

Annual direct fixed costs $1,750,000

Annual overhead allocation $395,000

Expected annual utilization 35,000 visits

A. 1. What per visit price must be set for the service to breakeven? 2. To earn an annual profit of $275,000?

B. Repeat part A but assume that the variable cost per visit is $50.

Reference no: EM131935614

Questions Cloud

Cash flows of the two mutually exclusive projects : Consider the following cash flows of the two mutually exclusive projects for Mario Brothers.

When payment is made on the net due date using ear : Calculate the cost of trade credit when payment is made on the net due date using EAR (also known as APY).

Calculate the profitability index for project : You are asked to evaluate the following two projects for the Norton corporation. Use a discount rate of 10 percent. Use Appendix B for an approximate answer.

What amount of money will you have at the end of the year : If you continue making these monthly investments for 30 years, what amount of money will you have at the end of the 30th year?

What per visit price must be set for service to breakeven : What per visit price must be set for the service to breakeven?

Compute the incremental income after taxes : You have been asked to assess the expected financial impact of each of the following proposals to improve the profitability of credit sales made.

What are the expected cash collections for months : Utilizing the attached data what are the expected cash collections for months 3 & 4.

Considering expanding its wine-making operations : Lakeside Grapes is considering expanding its wine-making operations.

What is the npv of each alternative : What is the cost of each alternative. What is the NPV of each alternative

User Account

All Pages