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Finance

Problem:

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

Annual direct fixed costs: $500,000

Annual overhead allocation: $50,000

Expected annual utilization: 10,000 visits

Required:

Question 1: What per visit price must be set for the service to break even? To earn an annual profit of $100,000?

Question 2: Repeat Part a, but assume that the variable cost per visit is $10.

Question 3: Return to the data given in the problem. Again repeat Part a, but assume that the direct fixed costs are $1,000,000.

Question 4: Repeat Part a assuming both a $10 variable cost and $1,000,000 in direct fixed costs.

Please provide full description and show your all calculation

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91146494

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