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1) Assume that the managers of Fort Winston Hospital are setting the price on a new outpatient service. Here are relevant data estimates: Variable...

7.1) Assume that the managers 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 (visits)    10,000


a. What per visit price must be set for the service to break even?  To earn 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 report Part A, but, assume the direct fixed costs are $1,000,000. 

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  • Thank you very much! This was extremely helpful! I am also in the process of submitting some more questions that I need help with. If you are available and have the time I would be very grateful for your help with those as well. Unfortunately I am on a time crunch, I need to figure it all out by midnight. Thank you and I hope you are enjoying your Easter!
    • Harry1609
    • Apr 01, 2018 at 7:47pm

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  • Hi, hope this answer serves you right and I wish you all the best in your studies. Thanks!
    • mokech
    • Apr 01, 2018 at 12:40am
  • Happy Easter!
    • mokech
    • Apr 01, 2018 at 12:41am
  • Thank you very much! This was extremely helpful! I am also in the process of submitting some more questions that I need help with. If you are available and have the time I would be very grateful for your help with those as well. Unfortunately I am on a time crunch, I need to figure it all out by midnight. Thank you and I hope you are enjoying your Easter!
    • Harry1609
    • Apr 01, 2018 at 7:39pm

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