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    Accounting/Business Analysis/Financial Reporting

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    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?

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    https://brainmass.com/business/project-management/accounting-business-analysis-financial-reporting-306895

    Solution Preview

    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.

    I. Program Area Costs for Administration Salaries:
    SALARIES:
     Administrator $60,000
     Assistant $35,000
     Two Secretaries $42,000
    SUPPLIES $35,000
    ADVERTISING & PROMOTION $9,000
    PROFESSIONAL MEETINGS/DUES $14,000
    PURCHASED SERVICES:
     Accounting and billing $15,000
     Custodial $13,000
     Security $12,000
     Consulting $10,000
    TOTAL: $60,000 + $35,000 + $42,000 + 35,000 + $9,000 + $14,000 + $15,000 + 13,000 + 12,000 + $10,000 = $103,000
    II. Community Mental Health Services Salaries:
    SALARIES (two social workers) $46,000
    TRANSPORTATION $10,000
    TOTAL: $46,000 + $10,000 = $56,000
    III. Outpatient Mental Health ...

    Solution Summary

    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.

    $2.19