You are considering starting a walk-in clinic. Your financial projections for the first year of operations are as follows:

Number of Visits

20,000

Utilities

$4,500

Wages and Benefits

$220,000

Medical Supplies

$55,000

Rent

$10,000

Administrative Supplies

$15,000

Depreciation

$40,000

Assume that all costs are fixed except supplies costs, which are variable.

a.What is the clinic's underlying cost structure?

b.What are the clinics expected total cost?

c.What are the clinic's estimated total cost at 7,500 visits? At 12,500 visits?

d.What is the average cost per visit at 7,500, 10,000 and 12,500 visits?