This website uses cookies to ensure you have the best experience. Learn more

Budget Report

516 words - 3 pages

Budget Report
We were offered the following data to complete a budget for a hospital. The data contained the following: The hospital had a total of 35 beds of which 10 beds were on a discount, either 50 % discount or full discount. Three different capacities were given to us, 100%, 90% and 75%. The total number of patient days at 100% capacity is 12775 days, 11497.5 days at 90% capacity and 9581.25 days at 75% capacity. The hospital’s fixed costs amounted to $10,100 per month and the variable costs were $179.45 per day.
The first step in the preparation of the budget was finding the contribution margin (CM) for the hospital under the assumptions that 10 beds are at 50% discount and under every capacity, and that 10 ...view middle of the document...

The gross profit of 50% discount came out to be higher and almost double the gross profit of that at 100% discount. The effect of the 100% discount on the CM mentioned in the previous paragraph is carried forward to the gross profit causing a substantial decrease in the hospital’s gross profit.
The last step was calculating the fee/patient under the assumption that the hospital borrows one million dollars with an interest rate of 12%. This loan is to be repaid in equal installments over 10 years. After calculating the present value of the annuities of the loan, the sum of the fixed and variable costs with the annuity at its present value, represented the total cost to be covered by the hospital in order to break-even. Knowing the total patient days and the number of beds discounted, the fee/patient at 100% discount and at 50% discount was calculated in order to break even. The different capacities showed us different fee/patient as well.
It is concluded that the lower the capacity the hospital is operating at, the higher the fees that are charged to patients. Not to forget that also when the discount is higher the fee/patient gets. This is due to fixed costs and to the variable costs that don’t change with the number of units, and the discounted beds are fixed at all capacities. This implies that the 100% capacity and the 50% discounted beds requires the lowest fee/patient and the 75% capacity at 100% discount requires the highest fee/patient. These decisions should be took based on the market around the hospital and how much target income the hospital intends to generate.
Chafi Badreddine

Other Papers Like Budget Report

Flexible Budget Essay

368 words - 2 pages flexible budget. If cost was identified as a fixed cost, and no changes are made in the budgeted amount when the flexible budget is prepared. Differences may occur in fixed expenses, but they are not related to changes in activity within the relevant range. When preparing budget reports, it is important to include in the report the items the manager can control. If a manager is only responsible for a department's costs, to include all the

Family Budget Essay

5449 words - 22 pages Household Budget If you're putting your household budget together and you're wondering how you compare to an average household, then we have several more online tools that might be of interest to you. Our family budget template allows you to create a family budget, and this particular form will also provide you with a variance report (how well you're doing). That budget form was built from an average family budget. You can download that

Ma225 Managerial Accounting Wk7 Assignment

783 words - 4 pages .............................................. 8,500 Cost per pound ................................................................. X $6 Total cost of direct materials purchases ........................ $51,000 BE10-2 Data for Maris Company are given in BE10-1. In the second quarter, budgeted sales were $380,000, and actual sales were $384,000. Prepare a static budget report for the second quarter and for the year to date

Bus5431 Trochejm Week 7 10-1case Study

552 words - 3 pages someone double checks her work. The ideal solution is for her to be truthful about her department and request an increase to cover unknown situations. Unforeseen events can be forecasted into a budget expense report if it’s within reason and allocated correctly into the overall department funding. This is not an unheard of figure or calculation. CONCLUSION In closing, the actual figures will always vary; there is always an increase in the

Determining Financial Viability

836 words - 4 pages . It includes materials price and quantity variance, labor rate and efficiency variance, and the variable overhead spending and efficiency. The variance report will show if the current trends were addressed and it will show the financial staff any overspending or under spending based on the financial and budget goals. From this, the manager can determine that there was a rise in salaries and the supplies cost was low. The high salaries can be the


2453 words - 10 pages solution to the prevailing political impasse, optimism may win and pessimism may wither. Unless politics is set right, economic performance might go wrong.  The writer is a Professor of Economics at Jahangirnagar University. Budget not ‘Digital BD’ friendly, says BASIS Published : Thursday, 13 June 2013 FE Report Bangladesh Association of Software and Information Services (BASIS) Wednesday said the proposed budget is not friendly

Project Management Week 4

646 words - 3 pages continued effort to report the progress that is being made on the plant project we would like to report how our project team is planning and monitoring costs, budget and earned value. As the project manager, I have used Key Performance Indicators (KPIs) to identify that the project is currently within budget. We have assigned fixed costs to the following tasks: * Building Design = $32,000 * Site Cost = $216,000 * Permit Cost

Research Paper On Calbee

267 words - 2 pages budget. Consider last year's budget for similar programs or create a new budget for new programs. o 2 Organize personnel management by developing an organizational structure to avoid wasting time, money and duplication of effort. Classify people into a hierarchy to manage the various activities in order for each employee to know who to report to and who he is accountable to. Assign supervisory responsibilities of the departments to

Hsa 525 Homework Week 7

804 words - 4 pages ) has long wanted to modify what costs are identified and what costs are allocated (along with the method of allocation). This is a golden opportunity to do so. To gain ammunition for the change, the CFO is preparing to conduct a survey.The surveywill obtain a variety of suggestions for potential changes in allocation methods for the new operating budget report formats. You have been selected as one of the employees who willbe surveyed

Budget Cuts In Education Of United States

1789 words - 8 pages Teo 1 Charles Teo 29 March 2012 Budget Cuts In Education of United States On February 14, 2011, Jackie Calmes reports that President Obama proposed to reduce spending with added revenue to recover $1.1 trillion or 10% of the deficits within 10 years timeframe (1). The new budget cut has certainly impacted the entire nation in all kinds of ways. “Out of the 47 States with newly enacted budgets, 38 or more states are making deep, identifiable cuts

Business Discussion

669 words - 3 pages change. A manager needs to know whether a budget’s costs are considered fixed or variable (Baker & Baker, 2014). Cash flow reporting is an important tool used when constructing a capital expenditure budget. However, there are four different capital budgeting methods that can be used to report the cash flow: payback method, accounting rate of return, net present value (NPV), and internal rate of return (IRR). Each of these methods have their own

Related Essays

Public Budgeting Essay

1721 words - 7 pages . During budget preparation, there are limited opportunities for direct participation of civil society and there is no mechanism for formal consultation during the process. Below, there is shown the cycle of budget process in Kosovo. As regards, to expenditure reporting, the expenditures are reported in two directions. First, budget organizations have to report to the Ministry of Finance, and second Ministry of Finance reporting the

Acc 548 Complete Course Material Essay

1359 words - 6 pages 548 Week 5 Learning Team Assignment Reporting Requirements Memo ACC 548 Week 6 Individual Assignment Comprehensive Annual Financial Report Budget Analysis ACC 548 Complete Course Material Follow Link Below To Get Tutorial Description: ACC 548 Week 1 Individual Assignment Comprehensive Annual Financial Report Briefing ACC 548 Week 2 Learning Team Assignment Text Problem

Budget And Control Essay

1841 words - 8 pages the likes may require additional budget.  Performance Reports Performance reports are not effective unless there is a continuous flow up of the report by authorized bodies. These reports should be prepared at regular intervals/say each on quarterly; semiannually and annually to show comparison of actual with that of budgeted. Such report showing favorable/ fair/ or unfavorable/ unfair/variance. In Adama municipality, performance report

Philippines National Budgeting Essay

4887 words - 20 pages version of the general appropriations bill which is contained in a bicam report. The bicam report is brought back to both houses for approval of their members.   Approval of the consolidated budget by Congress does not yet complete the budget authorization phase. Just like any other legislative enactment, the budget bill is sent to the President for its signature for it to become the General Appropriations Act (GAA). The President is given thirty