Assume that the managers of Dominion Healthcare facility are setting the price on a new outpatient service. Here are the relevant data estimates:

Annual direct fixed costs $500,000

Variable cost per visit $5.00

Annual overhead allocation $50,000

Expected annual utilization 10,000

a. What per-visit price must be set for the service to breakeven? 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.