Question from Gapenski’s Fundamentals of Health care Finance. Assume that the managers of Fort Winston Hospital are setting the price on a new outpatient service. Here are the relevant data estimates: Variable Cost per visit $5.00Annual direct fixed costs $500,000 Annual Overhead allocation $50,000Expected annual utilization 10,000 visitsA. what per visit price must be set for the service to break even? What price must be set 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.
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