Metropolitan Dental Associates is a large dental practice in Chicago. The firm's controller is preparing the budget for the next year. The controller projects a total of 48,000 office visits, to be evenly distributed throughout the year. Eighty percent of the visits will be half-hour appointments, and the remainder will be one-hour visits. The average rates for professional dental services are $60 for half-hour appointments and $115 for one-hour office visits. Ninety percent of each month's professional service revenue is collected during the month when services are rendered, and the remainder is collected the month following service. Uncollectible billings are negligible. Metropolitan's dental associates earn $95 per hour. Metropolitan uses activity-based budgeting to budget office overhead and administrative expenses. Two cost drivers are used: office visits and direct professional labor. The cost-driver rates are as follows: Patient registration and records All other overhead and administrative expenses Required: $ 3.00 $ 7.00 per office visit (of any length) per direct professional labor hour 1. Prepare the direct-professional-labor budget schedule for the month of June. 2. Prepare the budget schedule for cash collections during June for professional services rendered during May and June. 3. Prepare the overhead and administrative expense budget schedule for the month of June.
Metropolitan Dental Associates is a large dental practice in Chicago. The firm's controller is preparing the budget for the next year. The controller projects a total of 48,000 office visits, to be evenly distributed throughout the year. Eighty percent of the visits will be half-hour appointments, and the remainder will be one-hour visits. The average rates for professional dental services are $60 for half-hour appointments and $115 for one-hour office visits. Ninety percent of each month's professional service revenue is collected during the month when services are rendered, and the remainder is collected the month following service. Uncollectible billings are negligible. Metropolitan's dental associates earn $95 per hour. Metropolitan uses activity-based budgeting to budget office overhead and administrative expenses. Two cost drivers are used: office visits and direct professional labor. The cost-driver rates are as follows: Patient registration and records All other overhead and administrative expenses Required: $ 3.00 $ 7.00 per office visit (of any length) per direct professional labor hour 1. Prepare the direct-professional-labor budget schedule for the month of June. 2. Prepare the budget schedule for cash collections during June for professional services rendered during May and June. 3. Prepare the overhead and administrative expense budget schedule for the month of June.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
Section: Chapter Questions
Problem 11CE: Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted...
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:Metropolitan Dental Associates is a large dental practice in Chicago. The firm's controller is preparing the budget for the
next year. The controller projects a total of 48,000 office visits, to be evenly distributed throughout the year. Eighty
percent of the visits will be half-hour appointments, and the remainder will be one-hour visits. The average rates for
professional dental services are $60 for half-hour appointments and $115 for one-hour office visits. Ninety percent of each
month's professional service revenue is collected during the month when services are rendered, and the remainder is
collected the month following service. Uncollectible billings are negligible. Metropolitan's dental associates earn $95 per
hour.
Metropolitan uses activity-based budgeting to budget office overhead and administrative expenses. Two cost drivers are
used: office visits and direct professional labor. The cost-driver rates are as follows:
Patient registration and records
All other overhead and administrative expenses
Required:
$ 3.00
$ 7.00
per office visit (of any length)
per direct professional labor hour
1. Prepare the direct-professional-labor budget schedule for the month of June.
2. Prepare the budget schedule for cash collections during June for professional services rendered during May and June.
3. Prepare the overhead and administrative expense budget schedule for the month of June.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2 Required 3
Prepare the overhead and administrative expense budget schedule for the month of June.
Patient registration and records
Other overhead and administrative expenses
Total overhead and administrative expenses
$
0
< Required 2
Required 3 >
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