What per visit price must be set for service to breakeven

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Reference no: EM13881971

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

Variable cost per visit $25.00

Annual Direct Fixed Costs $750,000

Annual Overhead Allocation $275,000

Expected Annual Utilization 20,000 visits

What per visit price must be set for the service to breakeven? To earn an annual profit of $100,000?

Repeat Part a, but assume that the variable cost per visit is $27.

Return to the original data given in the problem. Again repeat Part a, but assume that direct fixed costs are $800,000.

Repeat Part a assuming both a $27 variable cost and $800,000 in direct fixed costs.

Reference no: EM13881971

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