Breakeven Analysis SETTING PRICES ON INDIVIDUAL SERVICES VALUES NEW SERVICE: PRI

Question

Breakeven Analysis SETTING PRICES ON INDIVIDUAL SERVICES VALUES NEW SERVICE: PRIMARY CARE OFFICE EXTENSION PROJECTED DATA: VARIABLE COST PER VISIT $17 ANNUAL DIRECT FIXED COST $138,000 ANNUAL OVERHEAD ALLOCATION $41,000 NUMBER OF VISITS 5,950 WHAT PRICE MUST BE SET TO ACHIEVE BREAKEVEN POINT? WHAT PRICE MUST BE SET TO ACHIEVE $30,000 PROFIT? Breakeven Analysis SETTING PRICES ON INDIVIDUAL SERVICES VALUES NEW SERVICE: PRIMARY CARE OFFICE EXTENSION PROJECTED DATA: VARIABLE COST PER VISIT $17 ANNUAL DIRECT FIXED COST $138,000 ANNUAL OVERHEAD ALLOCATION $41,000 NUMBER OF VISITS 5,950 WHAT PRICE MUST BE SET TO ACHIEVE BREAKEVEN POINT? WHAT PRICE MUST BE SET TO ACHIEVE $30,000 PROFIT?

Explanation / Answer

ANSWER:

1. Price to achive breakeven :

Total Expenses = (17*5950) + 138000 + 41000 = 280,150

So, 280150 / 5950 = 47.08

therefore, price to attain break even should be $47(Approx)

2.To achieve 30,000 profit, Price should be

= (280150+30000) /5950 = $ 52.13

Thanks N please Rate :)

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