Problem: Assume that the managers of Happy Hospital are setting the price of a n

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Problem: Assume that the managers of Happy Hospital are setting the price of a new outpatient service. Here are relevant data estimates: Variable cost per visit $5.00 Annual direct fixed costs $500,000 Annual overhead allocation $50,000 Expected annual utilization 10,000 visits a) What per visit price must be set for the service to break even? To earn an annual profit of $10,000 b) Repeat part a, but assume that the variable cost per visit is $10.00 c) 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. direct fixed cost

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