Getwell Clinic Budget

Running head: PREPARING THE BUDGET

Preparing the Budget

University of Phoenix

Getwell Clinic Budget Proposal

Included below is the budget proposal for 2015. This proposal has been budgeted for 30,000 patient visits per year, which is 2,500 patient visits per month. Variable costs per patient have not changed. The salaries of 4 physicians have been included in the fixed costs since each physician is expected to cover 6,000 visits per month. The proposal also includes the purchase of $80,000 worth of equipment; included in the equipment cost is the purchase of eye exam charts for complimentary eye tests during the appointment with the physician. With net income at $68,000, it will not be necessary to increase the cost per visit. $5,000 has been taken out of cash and $75,000 has been borrowed from the bank to pay for the equipment. It is my belief that it is important to take only $5,000 out of the cash and keep the rest on hand for emergencies or unexpected circumstances. One month of supplies are included in accounts payable since supplies are paid in the month following the purchase. The depreciation expense on the equipment is $16,000 per year for five years. With the intent to improve collections, there is a resulting balance of $220,000 in patient receivables.

Clinic Budget

A. Profit plan for the year 2015

Budget patient visits (24,000 population X 25% X 5 visits per yr) 30,000

Avg. revenue per visit ($50 X 30,000 visits) $1,500,000

Variable expenses:

Medical supplies ($6 X 30,000 visits) $180,000

Other variable operating expenses ($4 X 30,000 visits) $120,000

Total variable expenses $300,000

Contribution margin $1,200,000

Fixed expenses:

Salaries (Nurses, Admin, Tech & 4 Physicians) $972,000

Rent $48,000

Other fixed expenses (Service & Operating) $96,000

Depreciation expense ($80,000 / 5 years) $16,000

Total fixed expenses $1,132,000...