6. Assume the managers of Professor Willis Hospital are setting the price on a new outpatient service. Below are the relevant facts used for estimates: (5 POINTS)

Variable costs/visit $5.00

Annual direct fixed costs $500,000

Annual overhead allocation $50,000

Expected annual utilization 10,000 visits

1. What price per visit must be set for the service to break even? To earn an annual profit of $100,000.
2. Repeat Part A but assume the variable cost/visit is $10.00.
3. Return to the data given above. Again, repeat Part A, but assume the direct fixed costs are $1,000,000.
4. Repeat Part A assuming both a $10.00 variable cost and $1,000,000 in direct fixed costs.