The urgent care manager must resubmit her budget based on 2015 projected visits. The 2015 budget should be based on actual expenses and visits incurred during the first seven months of 2014.
Cost standards (2014) and budget standards (2015) must be prepared for all variable costs (indicated by a V behind the object code description). All fixed costs (F) should be projected using the incremental budgeting methodology.
Projected visits is 2015 is 52,560. Salary and fringe benefit (object codes 4000-4199) increases for all personnel should be estimated at 4.0% except for health insurance (4120) which is expected to increase by 8%. Input price increases for supplies and other costs (4200-4960) should be increased by 3% except for medications, 5% increase and profession insurance, 10%. All increases are effective January 1, 2015.
The budget report, BudgetCh06, Problem 6.1 tab, shows the urgent care centers expenses for 2013 and the actual and budgeted expenses for the first seven months of 2014.
The CEO has requested all department heads submit their 2015 operating budget by Tuesday, November 4, 2014. The 2015 fiscal year begins January 1, 2015.
|
Total Visits
|
51,986
|
30,331
|
30,672
|
52,560
|
|
|
|
|
|
|
|
Obj.Code
|
Description
|
2013
|
Actual 2014
|
Budget 2014
|
Budget 2015
|
|
4010
|
Physician salaries - V
|
$960,000
|
$585,306
|
$576,800
|
________
|
|
4020
|
Nursing staff salaries - V
|
1,380,000
|
857,157
|
829,150
|
________
|
|
4030
|
Management & clerical salaries - F
|
780,000
|
466,971
|
468,650
|
________
|
|
4110
|
FICA - F
|
238,680
|
143,397
|
143,407
|
________
|
|
4120
|
Health Insurance - F
|
390,000
|
238,760
|
234,325
|
________
|
|
4130
|
Retirement - F
|
124,800
|
76,763
|
74,984
|
________
|
|
4140
|
Unemployment - F
|
31,200
|
18,323
|
18,746
|
________
|
|
4211
|
Medications - V
|
148,152
|
91,687
|
89,015
|
________
|
|
4212
|
Medical instruments - V
|
102,792
|
64,287
|
61,761
|
________
|
|
4214
|
Bandages, gauze... - V
|
57,468
|
34,140
|
34,529
|
________
|
|
4216
|
Latex gloves, gowns... - V
|
40,416
|
24,476
|
24,283
|
________
|
|
4216
|
Sterile wipes - V
|
26,820
|
15,780
|
16,114
|
________
|
|
4250
|
Office supplies - V
|
115,200
|
69,388
|
69,216
|
________
|
|
4280
|
Cleaning supplies - V
|
39,048
|
23,103
|
23,461
|
________
|
|
4310
|
Rent - F
|
144,000
|
89,251
|
86,520
|
________
|
|
4350
|
Maintenance - F
|
13,764
|
11,245
|
8,270
|
________
|
|
4410
|
Electricity - F
|
10,788
|
6,684
|
6,482
|
________
|
|
4420
|
Gas - F
|
18,504
|
11,215
|
11,118
|
________
|
|
4430
|
Water and Sewage - F
|
6,756
|
4,225
|
4,059
|
________
|
|
4440
|
Telephone - F
|
3,228
|
2,004
|
1,939
|
________
|
|
4930
|
Housekeeping - F
|
36,000
|
21,694
|
21,630
|
________
|
|
4940
|
Travel/professional meetings/meals - F
|
7,908
|
4,744
|
4,751
|
________
|
|
4945
|
Professional Insurance - F
|
22,380
|
15,669
|
13,447
|
________
|
|
4950
|
CME - F
|
29,856
|
17,994
|
17,938
|
________
|
|
4960
|
Other expenses - F
|
57,732
|
35,955
|
34,687
|
________
|
|
|
$4,785,492
|
$2,930,217
|
$2,875,283
|
________
|
B. Compare and contrast the incremental budget (prepared in homework 4) and the flexible budget.
C. Assume 2015 has been completed and actual output is 53,011, restate (or flex) the budget, what is the final budget the manager will be accountable to?
D. Assume 2015 has been completed and actual output is 51,543, restate the budget what is the final budget the manager will be accountable to?