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PROBLEM 6 Assume that the managers of County General Hospital are setting the price on a new outpatient service. Here are relevant data estimates:
PROBLEM 6 Assume that the managers of County General Hospital are setting the price on a new outpatient service. Here are relevant data estimates: Variable cost per visit S Annual Direct Fixed Costs $ 25.00 1,625,000 Annual Overhead Allocation S Expected Annual Utilization - Visits 425,000 72,000 a. 1). What per visit price must be set for the service to reach accounting breakeven (Profit=$0)? 2). What per visit price must be set to earn an annual profit of $1,500,000? Accounting Breakeven Price: Profit $1.5M Price: b. Repeat Part a, but assume that the variable cost per visit is $30 and annual direct fixed costs are 1,750,000. Accounting Breakeven Price: Profit $1.5M Price:
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