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    Accounting Problem: Mental Health Agency

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    Consider the following scenario:

    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. 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
    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
    Psychiatrist $86,000
    Two Social Workers $70,000
    In an Excel spreadsheet:
    - Provide a dollar range of costs to reduce budgets (worst and best case analysis).
    - She needs to cut $94,000 in cost. Prioritize those cuts that can be made without impacting the operation or quality care of the organization.
    For more information on creating Excel Spreadsheets, please visit the Excel Lab.
    In addition to the Excel spreadsheet required to support your responses, you must prepare an APA formatted paper that will address the following:
    - Describe how managerial accounting is different from cost accounting.
    - Describe the lean production philosophy.
    - Compare and contrast accounting principles in lean production to those of typical production.
    - Describe how you would advise Dr. White to prepare for reduced budgets.

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    Solution Summary

    This solution provides assistance with the accounting problem attached regarding a mental health agency.