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

Variable cost per visit:

$5

Annual direct fixed costs:

$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 the direct fixed costs are $1,000,000.

d.Repeat part a, assuming both $10 in variable costs and $ 1000,000 in direct fixed costs