Scenario
One year ago, Metropolitan Memorial expanded its operations into a rural community located approximated a hundred miles from its main facility. The clinic offers a wide array of outpatient services. As the Senior Accountant, you are reviewing the clinic’s operating budget from the previous year. You have been asked by the hospital’s chief administrator to create a new six-month operations budget for the clinic.
Operating-Budget.xlsx – –See attached Excel Sheet
Instructions
Using an Excel spreadsheet, create a new six-month budget for the clinic that includes the following revenue and expense projections: (See the document, notes for how to add numbers to the spreadsheet)
- The clinic’s revenue is projected to grow by approximately 3% as a result of a new managed care contract.
- The cost of expenses is expected to increase to 1.5%.
- The clinic will also be adding a new roof to the facility at a projected cost of $50,000.
Then prepare a memo for the chief administrator. The memo should include a review of the previous year’s budget, an analysis of the upcoming changes (figures above), and a discussion about the impacts that these changes will have on the budget for the upcoming year.
****REMEMBER – Create a new six-month operations budget for the clinic (Excel Spreadsheet) & THEN write a MEMO with that information.****
Deliverable #6 – HSA5400
Who Am I? Senior Accountant
What am I doing? Create a new six-month operations budget for the clinic (Excel Spreadsheet) & THEN write a MEMO with that information.
You need TWO documents here: Excel Spreadsheet & Word MEMO
· The clinic’s revenue is projected to grow by approximately 3% as a result of a new managed care contract – How do we figure this out?
· Revenue last year = $402,220.00
· We need to ADD 3% to this to come up with THIS YEARS PROJECTED REVENUE
· To do that – change the percentage to a decimal = .03
· Then you can multiple by .03 = 402,220.00 * .03 = $12,066.60
· 402,220.00 + 12,066.60 = $414,286.60 (NEW REVENUE FOR YEAR)
· The cost of expenses is expected to increase to 1.5%.
· Do the same thing – Take last years expenses = $192,206.68
· Add the 1.5% by changing the percentage to a decimal .015
· DO THE MATH
· Take that number 192,206.68 + SUM of .015 = Find your new number
· The clinic will also be adding a new roof to the facility at a projected cost of $50,000.
· Add this in ON IT’S OWN NEW LINE
· Make sure you TOTAL everything UP!
· SAVE YOUR SPREADSHEET AS YOUR LASTNAME_DATE_DEL6 Ide_862024_Del6
· Then do your MEMO
ADDITIONAL RESOURCES
Additional Resources to help move those examples along that you need for the “A”:
Revenue Definition, Formula, Calculation, and Examples
Expense: Definition, Types, and How Expenses Are Recorded
,
Metropolitan Memorial
Memo
| To: |
CEO |
| From: |
Student Name |
| cc: |
Dr. M |
| Date: |
8/7/2024 |
| Re: |
2024/2025 Budget |
To get started right away, just tap any placeholder text (such as this) and start typing to replace it with your own. Want to insert a picture from your files or add a shape, text box, or table? You got it! On the Insert tab of the ribbon, just click the option you need. Find even more easy-to-use tools on the Insert tab, such as to add a hyperlink or insert a comment. Think a document that looks this good has to be difficult to format? Think again! To easily apply any text formatting you see in this document with just a click, on the Home tab of the ribbon, check out Styles.
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Budget
| Budget C | ||
| REVENUES | ||
| Description | Detail | Yearly Budgeted Amount |
| Clinic Revenue Lab | 325 clients per month, 3,900 total visits | 163,800.00 |
| Revenue Medications | 195 of billable labs per month, 2340 labs per year | 58,500.00 |
| Revenue Procedures | 162 meds per month, 1,950 per year | 39,000.00 |
| Revenue Less | # of billable procedures done per year | 26,000.00 |
| Contractuals | Percentage negotiated with payer | 114,920.00 |
| TOTAL CLINIC REVENUE | 402,220.00 | |
| EXPENSES | ||
| Description | Detail | Yearly Budgeted Amount |
| PAYROLL | ||
| Provider salary | Total salary | 60,000.00 |
| Receptionist salary | 13,395.00 | |
| LPN salary | 28,182.00 | |
| Total Salary & Wages: | 101,577.00 | |
| Provider FICA | Salary x 0.0765 | 4,590.00 |
| Receptionist FICA | Salary x 0.0765 | 1,024.68 |
| LPN FICA | Salary x 0.0765 | 2,155.92 |
| Total FICA | 7,770.60 | |
| Unemployment | ||
| Health Insurance | 10,222.08 | |
| Life Insurance | 2,216.00 | |
| Long Term Disability | 666.00 | |
| 401K Employer Contribution | ||
| Total Additional Benefits: | 13,104.08 | |
| TOTAL PAYROLL: | 122,451.68 | |
| OPERATING EXPENSES | ||
| Supplies Food | 100 | |
| Misc. Supplies | 1,000.00 | |
| Medications | 5,000.00 | |
| Medical Supplies | 4,500.00 | |
| Office Supplies | 500.00 | |
| Printing | 500.00 | |
| Postage | UPS, Fed Ex, Postage | 500.00 |
| Professional Fees | ||
| Consulting | Accountants fees | 1,000.00 |
| Audit Fee | 1,500.00 | |
| Legal Fees | 1,500.00 | |
| Licensing Fees | Clinic | 300.00 |
| Bank Fees | 250.00 | |
| Advertising | 5,000.00 | |
| Insurance | ||
| Worker's Compensation | 1,575.00 | |
| Gen/Pro/Med Mal | liability, professional liability, employment, practice liability, property insturance, etc. | 15,000.00 |
| Umbrella Ins. | 830.00 | |
| D&O Ins. | 1,000.00 | |
| Professional Development Meetings | Continuing education for provider and staff | 1,000.00 |
| Cont. Memberships etc. | Exp. Rural Health Association | 300.00 |
| Travel & Entertainment | Monies for getting to conference | 1,000.00 |
| Facility | ||
| Telephone | Regular Service | 1,800.00 |
| Internet Access | 300.00 | |
| Utilities | Water, Electric, Garbage | 5,000.00 |
| Small Equipment & Tools | 300.00 | |
| Equipment Rental | 1,200.00 | |
| Capital Equipment | 10,000.00 | |
| Rent or mortgage | 7,200.00 | |
| Maintenance | cleaning service, building & grounds upkeep | 1,600.00 |
| TOTAL OPERATING EXPENSES | 69,755.00 | |
| TOTAL EXPENSES | 192,206.68 | |
| Yearly Budgeted Amount | ||
| NET INCOME (Loss) | [Revenue – Expenses] | 210,013.32 |
