1. Develop a flexible budget for the medical supply costs of the clinic (Exhibit 2). Then conduct variance analysis for the clinic's supply costs. Briefly explain the factors that drove the supply cost overrun that the clinic has experienced.

2. Conduct an analysis of the staffing costs of the clinic. Compare the budgeted and actual minutes for the visits provided by nurse practitioners. Are the nurse practitioners overworked? Then compare the budgeted and actual minutes for the visits provided by the physician. Is the physician overworked? What should Dr. Flaysakier do about this?

3. Based on your analysis so far, how much should Dr. Flaysakier request in her budget for the upcoming year? Prepare the budget you would propose and clearly state any assumptions you made in the process. Provide a brief budget narrative to justify the proposed budget to the Undersecretary.

CLINIQUE NOSRAL Exhibit 2. Budgeted and Actual Visits and Medical Supply Costs 650 Budget Actual Medical Medical Type of Visit Visits Supplies Visits Supplies Immunization 72.000 $0.50 13.000 S0.60 Nutrition Counseling 6,000 $0.10 5,000 S0.12 Prenatal Care - NP 8.000 6,500 Prenatal Care - MD 800 Major Visit 3.000 $1.00 4,500 S1.30 Minor Visit 8,000 $0.20 8,000 S0.25 Total 37.800 37,650 Drugs, dressings, etc. per visit. In US dollar equivalents per visit Exhibit 3. Estimated and actual Visit Time Requirements Time in Minutes Pysician Nurse Practitioner Type of Visit Estimated Actual Estimated Actual Immunization 10 12 Nutriton Counseling 20 15 Prenatal Care IS IS 20 Major Visit 30 35 Minor Visit 15 15 About 10% of patients need to be seen by a physician. Exhibit 4. Budget for the Current Year (In US Dollar Equivalents) Last Year's This Year's Item Actual Budget Salaries: Physician $6,500 $7,140 Nurse Practitioners 9.000 12.000 Records Clerk 2.000 2.500 Other 1.200 Supplies & Miscellaneous: Medical Supplies 9,300 11.200 Other 1,250 1,500 Total $29,250 535540 Number Visits 31.350 37,800 1.200 An additional NP was included in this year's budget The salary per NP remained the same in the budget as in last year's actual CLINIQUE NOSRAL Exhibit 2. Budgeted and Actual Visits and Medical Supply Costs 650 Budget Actual Medical Medical Type of Visit Visits Supplies Visits Supplies Immunization 72.000 $0.50 13.000 S0.60 Nutrition Counseling 6,000 $0.10 5,000 S0.12 Prenatal Care - NP 8.000 6,500 Prenatal Care - MD 800 Major Visit 3.000 $1.00 4,500 S1.30 Minor Visit 8,000 $0.20 8,000 S0.25 Total 37.800 37,650 Drugs, dressings, etc. per visit. In US dollar equivalents per visit Exhibit 3. Estimated and actual Visit Time Requirements Time in Minutes Pysician Nurse Practitioner Type of Visit Estimated Actual Estimated Actual Immunization 10 12 Nutriton Counseling 20 15 Prenatal Care IS IS 20 Major Visit 30 35 Minor Visit 15 15 About 10% of patients need to be seen by a physician. Exhibit 4. Budget for the Current Year (In US Dollar Equivalents) Last Year's This Year's Item Actual Budget Salaries: Physician $6,500 $7,140 Nurse Practitioners 9.000 12.000 Records Clerk 2.000 2.500 Other 1.200 Supplies & Miscellaneous: Medical Supplies 9,300 11.200 Other 1,250 1,500 Total $29,250 535540 Number Visits 31.350 37,800 1.200 An additional NP was included in this year's budget The salary per NP remained the same in the budget as in last year's actual