Static versus Flexible Budgeting (Service Firm)

Wasatch Medical Clinic has three doctors on staff. The clinic’s budget for 2009 is as follows:

Required:
1. Is this a static or flexible budget?
2. Prepare a flexible budget showing expected income per doctor at 22,000, 26,000, 30,000, and 34,000 total patient visits.
3. Interpretive Question: Why does the expected income per doctor increase so dramatically as the number of patient visits increases?

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Wasatch Medical Clinic Budget for the Year Ended December 31, 2009 Expected number of patient visits Average charge per patient Total revenues Budgeted costs: Variable costs: Supplies for each patient ($2 x 26,000) Fixed costs: Utilities.. Rent Nurses' salaries Malpractice insurance Equipment leases Other ... Total fixed costs Total budgeted costs Expected income. Number of doctors on staff Expected income per doctor $ 2,400 9,600 90,000 150,000 25,000 26,000 x $25 $650,000 $ 52,000 30,000 307,000 $359,000 $291,000 3. $ 97,000