Question :
Consider the given scenario:
Dr. Stephanie White, the Chief Administrator of Uptown Clinic, a community mental health organization, is concerned about the dilemma of coping with compact budgets next year and into the foreseeable future but increasing demand for services. To preparation for reduced budgets, she must first check where costs can be cut or reduced and still keeps the agency functioning. Below are some data from the past year.
Program Area
Costs
Administration
Salaries:
Administrator
$60,000
Assistant
$35,000
Two Secretaries
$42,000
Supplies
$35,000
Advertising and promotion
$9,000
Professional meetings/dues
$14,000
Purchased Services:
Accounting and billing
$15,000
Custodial
$13,000
Security
$12,000
Consulting
$10,000
Community Mental Health Services
Salaries (two social workers)
$46,000
Transportation
$10,000
Outpatient mental health treatment
Salaries:
Psychiatrist
$86,000
Two Social Workers
$70,000
In an Excel spreadsheet:
Provide a dollar range of costs to decrease budgets (best and worst case analysis).
She needs to cut $94,000 in cost. Prioritize those cuts that will be made without impacting the operation or quality care of the organization.
Explain how managerial accounting is different from cost accounting.
Illustrate the lean production philosophy.
Compare and contrast accounting principles in lean production to those of typical production.
Explain how you would advise Dr. White to prepare for reduced budgets.
Referencing style: APA format