What price per visit must be set for accounting breakeven


Problem 1: Ten physicians have just completed their residencies in internal medicine and are considering opening a group practice. They estimate the practice would have the following annual cost structure: annual fixed costs = $750,000 and variable cost per visit = $50. If volume in the first year is estimated to be 10,000 visits, what price per visit must be set if the practice wants to make an annual profit of $150,000?

A. $125

B. $50

C. $140

D. $90

E. $75

Problem 2: Ten physicians have just completed their residencies in internal medicine and are considering opening a group practice. They estimate the practice would have the following annual cost structure: annual fixed costs = $750,000 and variable cost per visit = $50. If volume in the first year is estimated to be 10,000 visits, what price per visit must be set if the practice wants to achieve accounting breakeven (e.g., profit = $0)?

A. $140

B. $125

C. $75

D. $50

E. $90

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Accounting Basics: What price per visit must be set for accounting breakeven
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