Activity Instructions: Budget Development
You are the Director of Budgeting and Reimbursement at Blank County Hospital in Blair, Wisconsin. The head of the Podiatry Department, Dr. P. Bunyon, is requesting your assistance in preparing his department budget for fiscal year end 2005. He presents you with the following information for the past year. Your Activity responses should be both grammatically and mechanically correct, and formatted in the same fashion as the Activity itself. If there is a Part A, your response should identify a Part A, etc. In addition, you must appropriately cite all resources used in your response and document in a bibliography using APA style. (A 3-page response is required for the combination of parts A, B, and C.)
Table 3: Blank County Hospital Data
| Part A | Based upon the 2004 data outlined above, perform the following. (20 points) | |
| 1. | Define and identify the variable, fixed, and mixed costs for fiscal year 2004. Explain why you categorized them as you have. | |
| 2. | From a budgeting perspective, explain the significance of accurately classifying each type of cost. | |
| Part B | Calculate the following (be sure to include all supporting computations). (35 points) | |
| 1. | The RN’s hourly salary for fiscal year 2004 | |
| 2. | The CMA’s hourly salary for fiscal year 2004 | |
| 3. | The PA’s hourly salary for fiscal year 2004 | |
| 4. | The per unit (patient visit) cost of supplies for fiscal year 2004 | |
| 5. | The per unit (kilowatt hour) cost of the variable component of electricity for fiscal year 2004 | |
| 6. | The per unit (gallon) cost of the variable component of water for fiscal year 2004 | |
| 7. | The per unit (patient visit) amount of revenue for fiscal year 2004 | |
| Part C | Using a flexible budget approach, develop a 2005 pro forma Income Statement. Use the pro forma Income Statement on the next page as your guideline. Show your calculations in the margins. The worksheet/assumptions you need to consider are contained below. (45 points) | |
| 1. | Volume for 2005 will be 6,500 patient visits. | |
| 2. | There will be a 5% increase in reimbursement per patient visit. | |
| 3. | There will be no increase in fixed costs. | |
| 4. | There will be no increase in the fixed cost component of any of the mixed costs. | |
| 5. | MidAm Energy estimates the clinic’s electrical usage to be 150,000 kilowatt hours, with no increase in the variable rate. | |
| 6. | The Blair County water department estimates the clinic’s water usage to be 50,000 gallons, with no increase in the variable rate. | |
| 7. | Medical supplies and salaries will increase in price by 3%. | |
NOTE: For this assignment, round all budgeted figures to the nearest $10 amount, e.g. $6,245.48 should be $6,250, while $6,244.23 should be $6,240.
Table 4: Blank County Hospital Income Statement
NOTE: Be sure to include all supporting calculations for your pro forma figures.
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more