The psychiatry department at St. Elsewhere Hospital offers four medical services to patients, and annual cost and utilization data are:

Service	VC per Service	Direct Fixed Costs	Activity Level
Therapy	$10	$400,000	4,000
In-Patient	500	2,000,000	2,000
Pharmacy	30	4,000,000	10,000
Examination	100	5,000,000	4,000

(A) What should St. Elsewhere set as the prices for each of these four services, if the hospital uses marginal cost pricing?

Therapy $

In-Patient $

Pharmacy $

Examination $

(B) What should St. Elsewhere set as the prices for each of these four services, if the hospital wants to cover direct costs?

Therapy $

In-Patient $

Pharmacy $

Examination $

(C) Suppose St. Elsewhere would like to generate $100,000 of profit from the psychiatry department. What prices should the hospital use now, assuming that target profit is allocated to services based on activity level?

Therapy $

In-Patient $

Pharmacy $

Examination $

(D) What should the St. Elsewhere set as the prices for each of these fours services if management wants psychiatry to absorb $350,000 over overhead costs, also allocated based on activity level?

Therapy $

In-Patient $

Pharmacy $

Examinatio