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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. 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
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.
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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