Fort Winston Hospital Case Study

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Problem 7.1 Fort Winston Hospital Variable cost per visit 5 Annual direct fixed costs 500,000 Annual overhead allocations 50,000 Expected annual utiliztion 10,000 a. What per-visit must be set for the services to break even? Variable Cost Variable cost per visit 5 Volume 10,000 Total Variable Costs 50,000 Fixed Costs Annual direct costs 500,000 Total Fixed Costs 500,000 Annual overhead 50,000 Total Costs 600,000 Volume 10,000 Price required to breakeven point 60 Profit of $100k Total cost 600,000 Profit 100,000 Total requirement 700,000 divide by volume 10,000 Price required to earn $100k 70

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