1. A hospital is setting the price on a new outpatient service with the following data estimates:

Variable cost per visit: $10

Fixed Costs: $750,000

Expected Annual utilization: 12,500 visits

a. What per visit price must be set to break even? Hint: Think about what the profit is when we say breakeven. What do we mean by per visit price?

b. What per visit price must be set to earn an annual profit of $250,000?