Solution-What per visit price must be set for service to

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

Reference no: EM13855821

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

Variable Cost Per Visit $5.00

Annual Direct fixed Cost $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?

b. Repeat Part a. but assume that the variable cost per visit is $10.

c. Return to the data given in the problem. Again repeat Part a, but assume that direct fixed costs are $1.000,000.

d. Repeat Part a assuming both a $10. Variable cost and $1,000,000 in direct fixed costs.

Reference no: EM13855821

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

Reference no: EM13855821

Reference no: EM13855821

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