Answer:
Price to be charged per visit = $90 per visit
Explanation:
We need to calculate the price per visit.
Desired profit = $10,000
Total costs for 1,000 visits = Variable Costs + Fixed Costs + Allocated Costs
Variable cost = $10 X 1,000 visits = $10,000
Fixed costs = $50,000
Allocated Overhead costs = $20,000
Total costs = $10,000 + $50,000 + $20,000 = $80,000
Total amount to be recovered = Total costs + desired profit
= $80,000 + $10,000 = $90,000
Total no of visits = 1,000
Price to be charged per visit = $90,000/1,000 = $90 per visit
