Question
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
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: $4 Annual direct fixed costs: $200,000 Annual overhead allocation: $35,000 Expected annual utilization: 8,000 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.
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