Management Accounting : key information
Not what you're looking for?
Dr. Stephanie White, the Chief Administrator of Uptown Clinic, a community mental health agency, is concerned about the dilemma of coping with reduced budgets next year and into the foreseeable future, but increasing demand for services. In order to plan for reduced budgets, she must first identify where costs can be cut or reduced and still keep the agency functioning.
See the attached file (data from the past year) and answer the following questions. You can use Excel to calculate.
1. Identify which costs you think are likely to be discretionary or committed costs.
2. One possibility is to eliminate all discretionary costs. What do you think of this recommendation?
3. How would you advise Dr. White to prepare for reduced budgets?
Purchase this Solution
Solution Summary
The costs you think are likely to be discretionary or committed costs are identified.
Solution Preview
COSTS LIKELY TO BE DISCRETIONARY
Program Area Costs
Administration
Purchased Services:
Accounting and billing
$15,000
Custodial
$13,000
Security
$12,000
Consulting
$10,000
Community Mental Health Services:
Transportation $10,000
COSTS LIKELY TO BE COMMITTED
Program Area Costs
Administration
Salaries:
Administrator
$60,000
Assistant
$35,000
Two Secretaries
$42,000
Community Mental Health Services
Salaries (two social workers) $46,000
Outpatient mental health treatment
Salaries:
Psychiatrist
$86,000
Two Social Workers
$70,000
ELIMINATING ALL DISCRETIONARY COSTS WOULD
Reduce the costs by $60,000. However, I would not advice Dr. White to take such a ...
Purchase this Solution
Free BrainMass Quizzes
Situational Leadership
This quiz will help you better understand Situational Leadership and its theories.
Employee Orientation
Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.
Organizational Behavior (OB)
The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.
Cost Concepts: Analyzing Costs in Managerial Accounting
This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.
SWOT
This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.