Assume that the manager of the rehabilitation department of Getwell Hospital is setting the price on a new outpatient service for electrical stimulation of muscles. Here are the relevant data estimates: Variable cost per visit: $15.00 Annual direct fixed costs: $650,000 Annual overhead allocation: $75,000 Expected annual visits: 8,000 What price per visit must be set for the service to breakeven?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Assume that the manager of the rehabilitation department of Getwell Hospital is setting the price on a new outpatient service for electrical stimulation of muscles. Here are the relevant data estimates:  

 

 

Variable cost per visit: $15.00

 

Annual direct fixed costs: $650,000

 

Annual overhead allocation: $75,000

 

Expected annual visits: 8,000

 

 

   What price per visit must be set for the service to breakeven?  

 

 

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