Homework Problem 3.1 Your hospital is considering offering a new outpatient service. Using the following data, answer the questions below. RELEVANT DATA: Variable cost per visit Annual direct fixed costs Annual overhead allocation Expected utilization (visits) $20 $700,000 $80,000 15,000 a. What is the breakeven price? b. What price is needed to earn a profit of $100,000?

Homework Problem 3.1 Your hospital is considering offering a new outpatient service. Using the following data, answer the questions below. RELEVANT DATA: Variable cost per visit Annual direct fixed costs Annual overhead allocation Expected utilization (visits) $20 $700,000 $80,000 15,000 a. What is the breakeven price? b. What price is needed to earn a profit of $100,000?

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter3: Cost Behavior And Cost Forecasting

Section: Chapter Questions

Problem 4MCQ: In the cost formula, the term 128,000,000 a. is the total variable cost. b. is the dependent...

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Now assume that the additional patients will add $200,000 in total to theCenter’s fixed costs. Now what is the expected profit on 20 new patients?On 40 new patients? (No new fixed costs are required to support the secondgroup of 20 patients.)
In the cost formula, the term 128,000,000 a. is the total variable cost. b. is the dependent variable. c. is the variable rate. d. is the total fixed cost. e. cannot be determined from the above formula. Use the following information for Multiple-Choice Questions 3-4 through 3-7: The following cost formula was developed by using monthly data for a hospital. Total Cost = 128,000,000 + (12,000 Number of Patient Days)
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SnowParadise operates a Rocky Mountain ski resort. The company is planning its lift ticket pricing for the coming ski season. Investors would like to earn a 15% return on investment on the company's $135,000,000 of assets. The company primarily incurs fixed costs to groom the runs and operate the lifts. SnowParadise projects fixed costs to be $36,000,000 for the ski season. The resort serves about 750,000 skiers and snowboarders each season. Variable costs are about $11 per guest. Currently, the resort has such a favorable reputation among skiers and snowboarders that it has some control over the lift ticket prices. Read the requirements. Requirement 1. Would SnowParadise emphasize target pricing or cost-plus pricing? Why? SnowParadise should emphasize a reputation, managers will have willing to pay. approach to pricing because it has been able to differentiate its ski resort from others in the area. Because of its good control over pricing. Of course, they still need to consider…
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a. Compute annual rate of return, Pay back period b NPV using 14% discounts rate , Is the Project acceptable using this discount rate Compute NPV using 11% discounts rate. Is the Project acceptable using this discount rate
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Please answer part 4. Thank you