Bridgestone Health Center: Cost-Vume-Profit(CVP) Analysis for Planning and Control

A business Case
Presented to the
Accountancy Department
De La Salle University

In partial fulfillment
Of the course requirements
In MODMGT1

Submitted to: Ms. Katherine Chua

Submitted by:
Ferrer, Jan Alyssa Dennise
Madamba, Ann
Tan, Baron
Vergara, Maria FRancesca

In the vast changing business environment, organizations have kept a single grip trying to cope up with the differing demands required from them. Stability has been the rising issue; hence business continuance is put to test. Questions such as, “will my revenue match up with my cost?” or “Do my business profit from this?” These issues do not only involve profit generating entities but non-profit organizations as well. It is a common mistake that non-profit organizations are supposedly to earn just enough to compensate for the expenses incurred. But, truth is, non-p[profit organizations, need as surplus to survive the demands of a business. This would equip these nonprofit organizations from future contingencies and problems. In the business case provided, Bridgestone Behavioral Health Center, is a non-profit rehabilitation hospital. The said entity caters patients suffering from drug or addiction. The entity has a varied services offering to both checked-in patients and Out-patients. The said services are as follow: Patient Assessment, Lab Urinalysis, Case , Group Counseling, Individual Counseling, Crisis, Intensive Medical Somatic , Methadone Maintenance, and Ambulatory Detoxification. In the recent events, Dr. Thomas Russel, the qualified director of the said organization has been having doubts about the stability of the said entity. Given such, he asked for assistance from the company’s accountant, Susan Smyth. With her hand tied up with work, Susan recommended to have a specialist look into their situation. The external party hired by Dr. Russel suggested three ways in order to improve the overall financial performance of the said entity. First, the entity should set up a required service volume and the entity shall comply with its number. Next, the entity should identify with fixed expenses are discretionary and which are committed. This step would enable them to cut down their cost and improve financial performance. Lastly, off-campus programs were suggested. It was discussed that a big percentage of employer problems is due to substance usage, given such, there would be a number of companies willing to accommodate their services. The group intends to objectify the appropriateness of the Susan’s recommendations. Also, the group intends to study the financial standing of the said entity,