Managerial accounting
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Part 1 DELIVERABLE LENGTH: 1-2 PAGES
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. Below are some data from the past year.
Program Area Costs
Administration
Salaries:
? Administrator $60,000
? Assistant $35,000
? Two Secretaries $42,000
Supplies $35,000
Advertising and promotion $9,000
Professional meetings/dues $14,000
Purchased Services:
? Accounting and billing $15,000
? Custodial $13,000
? Security $12,000
? Consulting $10,000
Community Mental Health Services
Salaries (two social workers) $46,000
Transportation $10,000
Outpatient mental health treatment
Salaries:
? Psychiatrist $86,000
? Two Social Workers $70,000
1. Give a dollar range of costs to reduce budgets (worst and best case analysis).
2. You need to cut $94,000 in cost. Prioritize those cuts that can be made without impacting the operation or quality care of the organization.
3. How would you advise Dr. White to prepare for reduced budgets?
PART 2 DELIVERABLE LENGTH 4 PARAGRAPHS
You have been asked to speak about the topic of responsibility centers to a group of executives at a conference.
For this speech you should select a company/business that you are familiar with and briefly describe it. Give three examples of responsibility centers in that business. Describe how these responsibility centers interact.
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Solution Summary
The response addresses the queries posted in 727 words with references.
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The response addresses the queries posted in 727 words with references.
//Before writing about budgeting and its uses, we have to first understand what is budgeting and its scope. A budget is a statement of expenses and incomes of an organization for the future and there is a scope to reduce the costs to increase the profit of any organization. /
Introduction
In this case, Dr. Stephanie White, who is the Chief Administrator of Uptown Clinic (a community mental health agency), is in a perplex state of matching up with the reduction in the budgets in the coming year and near future, however enhancing the demand for its services. It has to reduce its budget and recognize the costs which can be reduced. Even in this situation, it has to maintain the efficient operation of the agency.
//Next, we have reduced the budget of the several costs in the range of the amount of $94,000 agency. Reduction of budgets also requires systematic and logical assessment of the costs and prioritization.//
In this situation, the use of the worst and best case analysis have been used for the reduction in the budget. The worst case will be the one where the costs have not been reduced at all and the best case is the case where the cost has been reduced to maximum possible extent for reducing the overall budget so that the organization can be benefited. Many program area costs like the supplies, advertising and promotion, professional meetings/dues, transportation and expenses on the outpatient mental health treatment can be cut down by Dr. White. Below has been given the dollar range of reduced costs.
//Above, we have explained the pattern of reduction of the costs and the amount of reduction in the cost has been mentioned. The total of $94,000 has been reduced. Now, we have explained the rationale for the reduction in the costs. //
Prioritization of the Cost
The reductions in the costs have been designed in such a manner that they do not adversely affect the running of the agency and its efficiency (Kemp & Dunbar, 2003). Dr. White have cut down the cost up to an amount of $94,000 and all the costs have been reduced up to a reasonable extent as per their importance and use in the organization, so that there is no burden on any particular ...
Education
- MBA (IP), International Center for Internationa Business
- BBA, University of Rajasthan
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