Dorian Dermatology Associates consists of a medical suite of offices with two MDs, one office manager, two medical assistants, and one receptionist. The office manager provided the following information on Dorian’s operations:
a. Rent for the office suite is $1,200 per month.
b. Depreciation on furnishings and equipment is $1,000 per month.
c. When a patient calls for an appointment, the receptionist determines how long the appointment should take and allots one, two, three, or four 15-minute time slots. (For example, an initial visit is allotted 30 minutes, or two 15-minute time slots, but a follow-up visit might take only one 15-minute time slot.)
d. The office manager estimates that each patient seen during the month costs about $10 for office supplies. The estimate for medical supplies is a bit more complex.
One of the medical assistants feels that patients with longer appointments use more medical supplies than patients who need only a shorter appointment. After much discussion, she thinks that each patient uses about $5 of medical supplies for every 15-minute time slot. (That is, a patient who requires only a brief visit of 15 minutes would use about $5 in supplies, and one who requires a one-hour visit would average $20 of medical supplies.)
e. The office manager earns a yearly salary of $25,000, each medical assistant earns $18,000, and the receptionist’s salary is $15,000.
f. Utilities run about $500 per month.
g. A janitorial service cleans the offices twice a week for $250 per month.
h. Accounting and financial services cost $28,800 on average for the year.
i. Insurance runs about $36,000 per year.
j. Other expenses (magazine subscriptions, plants, and the like) are about $700 per month.
For the coming month, it is estimated that the doctors will see 800 patients, who will use a total of 1,200 15-minute time slots.

Required:
1. Categorize each cost as fixed or variable, and give its driver.
2. Prepare an overhead budget for May. Since the doctors split the profit from the practice, do not worry about the doctors’ salaries and consider all other expenses of the practice as overhead.