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ASSUME THAT THE MANAGER OF FORT WINSTON HOSPITAL ARE SETTING THE PRICE ON A NEW OUTPATIENT SERVICE. HERE ARE RELEVANT DATA ESTIMATES:

ASSUME THAT THE MANAGER OF FORT WINSTON HOSPITAL ARE SETTING THE PRICE ON A NEW OUTPATIENT SERVICE. HERE ARE RELEVANT DATA ESTIMATES:.

Variable cost per visit   $5.00

Annual direct fixed costs   $500,000

Annual overhead allocation   $50,000

Expected annual utilization  10,000 visits

 

a. What per visit 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 direct fixed costs are $1,000,000.

d. Repeat Part a assuming both a $10 variable cost and $1,000,000 in direct fixed costs.

 

Must be done on excel.

ASSUME THAT THE MANAGER OF FORT WINSTON HOSPITAL ARE SETTING THE PRICE ON A NEW OUTPATIENT SERVICE. HERE ARE RELEVANT DATA ESTIMATES:

Solution:

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