Directions: The purpose of a budget is to compare expected expenses to expected income and should always have net positive revenue over expenses (in other words, you should always expect to make more money than you plan on spending). As the year progresses, the budget is also used to compare actual values to projected values to see how well you are hitting projected income and spending. For this assignment, you will need to: 1. Determine the expected income for a fictional laboratory. See the assumptions below to calculate income. Create a list of expenses that you would realistically expect for any laboratory and set the value of these expenses. You will need to make educated guesses as to the value of the expenses (estimate the value based on work experience). Compare your total expected income to your total calculated expected expenses, and see if you are going to cover your expenses or are you going to lose money. Budgets with a projected loss will not be approved, so you'll need to make adjustments to your budget to make it a positive outcome. Once the budget has been prepared and approved, you should (theoretically) compare your actual expenses and actual income to your projections on a monthly basis. This comparison will help to keep you on track for the year. You don't want to go over one your expected expenses, and if you do, you better be ready to justify why you did! 2. 3. 4. Assumptions: INCOME You are the manager of a clinical laboratory that runs three lab tests: Urinalysis, CBCs, and Basic Metabolic Panel. The cost and charge of each test is as follows TEST VOLUME COST/Test CHARGE/Test Urinalysis CBC Basic Metabolic Panel 1000/month 700/month 1500/month $1.68 USD/test $1.29 USD/test $5.00 USD/test $7.00 USD/test $4.50 USD/test Assume that your payor mix is: 40% Medicare and 60% Private insurance, Medicare pays you 40% of the charge, and Private Insurance pays you 70% of the charge. Determine your net income based on this information. EXPENSES You have three lab techs (one for each shift) and one supervisor for these tests. (Assume the three lab techs take no days off and the supervisors only work Mon-Fri, no weekend and no holidays). Make educated estimates for salary expenses You rent the space for the lab. Monthly rent is $1500. What other expense can you list and estimate to prepare a budget for Fiscal year 2016-17? (Examples: utility bills such as electricity and water). Be as detailed as possible for the expenses. Using all the information gathered above, prepare a basic budget for the fiscal yea