Running Head: The Angeles of Mercy Clinic Budget

The Angeles of Mercy Clinic Budget Planning for Six Years

ACC/HC # 561

University of Phoenix

Professor: C.A. Reynolds

Dalia Kahill

November 22nd, 2010

The Angeles of Mercy Clinic Budget Planning for Six Years

Angeles of Mercy is a very unique clinic has been serving a suburban community with a population of about 24,000, about 25% are expected to be future patients for the clinic. Each patient is expected to average five visits per year. As a financial director for the organization; I was assigned to prepare a budget proposal for the year of 2015. The budget proposal is designed for having about 30,000 patient visits per year, which are about 2,500 per month. Variable costs per patient have not changed. The salaries of four physicians have been added to the fixed costs since each physician is expected to cover 600 visits per month. It also includes the purchase of $80,000 worth of equipment to prepare women pap smears for cytopathological laboratory testing during the OB/GYN visit. This machine will depreciate on the straight line basis over 5 years. Since the net income is $68,000, it won’t be crucial to increase the $ amount per visit. The clinic has put $5,000 as a down payment to buy the machine and the remainder of $75,000 has been borrowed from the bank as a line of credit. One month of supplies are included in accounts payable since supplies are paid in the month following the purchase. The depreciation expense on the pap smears machine is $16,000 per year for five years. There is improving in collections, which has led to a resulting balance of $220,000 in patient receivables.

Angeles of Mercy Clinic Budget

|A. Profit Plan for the Year 2015 | | | | |
|Budget Patient Visits (