1. Develop a revenue and expenses budget for both\"Alpha\" and \"Beta\" PCS cent
ID: 2493137 • Letter: 1
Question
1. Develop a revenue and expenses budget for both"Alpha" and "Beta" PCS centers.
2. For each line item in the budget, mention whether the items are variable or fixed, and and the basis of allocation or assignment for the budget for each center. (Note that professional reading fees and laboratory expenses are variable costs that need to be allocated based on the type of visit. Generally, an occupational health visit (category 8 and 9 on Table 3.3 and 3.4) including all physicals has reading and laboratory costs 1.4 times what a general medical visit incurs (Category 1, 2, or 3).)
3. Each center is expected to generate approximately the same profit margin. Given your analysis, will it? Should management change its expectations regarding average revenue per visit by center? To assist with this calculate the profit margin for each clinic. Submit a budget using Excel and answer the questions outlined above related to revenue.
Proposed Operational Budget for 2015 ($)
Budget Parameters
Patient Revenue: 2,424,000 Deductions 198,768 Net Revenue 2,225,232 Expenses: Salaries and Wages 1,181,200 Staff benefits 425,230 Administrative expenses 21,500 Advertising 3,000 Collection fees 1,800 Consultants 3,750 Computer support 34,000 Equipment leases 4,100 Insurance 28,100 Laboratory 49,000 Laundry/ and housekeeping 13,500 Legal/ Audit 8,450 Medical Supplies 64,750 Printing and postage 11,000 Profesional Fees 28,000 Rent 78,500 Repairs 3,500 Telephone 11,000 Utilities 19,200 Depreciation 73,000 Bad Debt Expenses 10,400 Total Expenses: 2,072,980Explanation / Answer
Total Patient Revenue: 2,424,000 Deductions 198,768 Net Revenue 2,225,232 Expenses: Proposed Operational Budget for 2015 ($) Salaries and Wages 1,181,200 Income (LOSS) Before taxes 152,252 Staff benefits 425,230 Taxes 60,901 Administrative expenses 21,500 Income (LOSS) after taxes 91,351 Advertising 3,000 Budget Parameters Alpha Beta Total Collection fees 1,800 Visits, budgeted 7,500 5,100 12,600 Consultants 3,750 Average revenue per visit ($) with no inseased basic visit fee 160 240 Computer support 34,000 Equipment leases 4,100 Insurance 28,100 Laboratory 49,000 Laundry/ and housekeeping 13,500 Legal/ Audit 8,450 Medical Supplies 64,750 Printing and postage 11,000 Profesional Fees 28,000 Rent 78,500 Repairs 3,500 Telephone 11,000 Utilities 19,200 Depreciation 73,000 Bad Debt Expenses 10,400 Total Expenses: 2,072,980 Netr Income 152,252 taxes 60901 Income After Tax 91,351
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