7.1) Assume that the managers of Fort Winston Hospital are setting the price on 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 (visits)    10,000

a. What per visit price must be set for the service to break even?  To earn annual profit of $100,000?

b.  Repeat part A, but assume that the  variable cost per visit is $10.

c.  Return to the data given in the problem. Again report Part A, but, assume the direct fixed costs are $1,000,000.