Project #46524 - Healthcare Finance

Review the information presented below in the Sample Operating Budget—Department of Physical Therapy and adjust this budget according to the following:


  • You have just learned that inpatient charges will probably be 3 percent higher than projected and that outpatient charges are expected to increase by 8 percent, and that your research grant support will be reduced by half.
  • The continuing education conference projected to net $3,200 has been canceled.
  • Salary expenses will likely be 2 percent higher than originally anticipated.
  • You are required to show a projected net profit of at least 50 percent of total revenue. If your revised budget generates less than this level of net profit or surplus, indicate where you can probably cut expenses to meet the target and explain why the expenses you have chosen to cut are your best choices.

Sample Operating Budget—Department of Physical Therapy


(July 1, 2013, through June 30, 2014)


I.  Revenue and Income


  A. Inpatient Charges                           $550,000


  B. Outpatient Charges                          310,000


  C. Research Grant Support                    29,000


  D. Continuing Education Conference       3,200


  E. Supplies and Equipment Sales           11,500


        Total Revenue                               $903,700


II.  Expenses


Direct Expenses


  A. Salaries                                           $260,000


  B. Consultant                                            2,500


  C. Honorarium                                          1,500


  D. Minor Equipment                                6,000


  E. Equipment Rental                                 2,000


  F. Travel                                                   2,500


  G. Telephone                                            5,000


  H. Supplies                                               6,000


  I. Postage                                                     350


  J. Copy Machine Rental                         11,000


  K. Advertisement                                     1,500


  L. Dues                                                        800


  M. Books                                                     350


  N. Equipment Maintenance and 2,000 Service Contracts       


        Total Direct Expenses                  $301,500


Indirect Expenses


  A. Employee Benefits (23%)               $59,800


  B. Administration                                   23,000


  C. Equipment Depreciation                      7,200


  D. Physical Plant Operation                   39,000


  E. Maintenance and Repairs                     2,000


  F. Building Depreciation                           6,000


  G. Laundry/Linen                                     2,500


  H. Housekeeping                                      4,900


        Total Indirect Expenses                $144,400


        Total Expenses                             $445,900


        Net Profit or Loss                         $457,800

Subject General
Due By (Pacific Time) 11/07/2014 03:00 pm
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