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8. If a budgetary weighted average contribution margin (WACM) percentage has been developed with an expected level of revenue and a planned fixed cost and the budgetary WACM percentage is in fact achieved in the next (future) time period, could the organization still face losses if the total revenue drops below the budgeted level or total fixed costs increase beyond the budgeted levels? Can you explain how losses still might occur even though the planned WACM percentage is being realized in the future time period? Exhibit2 Bridgestone Behavioral Health and Addiction Center Quarter 1 Next Yene's Budget Group Counseling Case Management Individual Crisis Intensive Counseling Intervention Outpatient Medical Somatic Methadone Maint Ambul Det Assessment Urinalysis Total 5 Revue Medicaid Rate Units el Service Ravenue State $ 20 1,000 $40,000 $ 100 2,888 $288.750 $ 30 1,500 $120.000 7.000 $ NO 3.000 $ 270.000 $ 140 375 5 57.500 $ 200 200 $20.000 $ 210,000 $ 110 500 $55.000 750 075 $56.623 $ 15 $250 2,000 275 500,000 $ 84,500 $1,100.750 51.250 52.000 7250 530.000 $135,750 $ 1250000 2.500 $ 0,500 125 $26.875 1.250 $ 211750 2.500 $.272.00 $ 120.000 562.500 $40,000 Variable Cuts Muciones Other 350.000 $ 30,000 $7.500 125 5125 $ 101,061 500 S 10563 $ 2.500 $ 2,500 $ 35,000 500 $ 35,500 $ 30,000 500 $ 3.500 $ 7,500 250 $ 2250 $ 24000 60.000 $ 170.063 4.238 $20,000 $35.000 375.000 350063 30.000 IND Contribute Margis $ 34,375 $ 187,311 $117.500 $18.750 $22.000 $ 14,750 $8.53 $(10,0001 $ 8.000 $ 79,750 $ 175.000 Stars Congos 156.01 48,621 100111 2.200 Transport Ocupplies Depreciation Other Total Food Expose 9256 131.014 s mos Exhibit 1: Bridgestone Behavioral Health and Addiction Center Next Year's Annual Budget Assessment Urinalysis Case Mensement Group Conseling Individual Crisis Intense Cousteling Intervention Outpati Medical Somali Methadone Maint Am Det Total Revenue Medicaid Rate Units of Service Revenue Stute Private Pay Total $ 10 4,000 $ 160,000 $ 100 11.550 $1,155,000 $ 80 6.900 $ 180,000 IMA EDUCATIONAL CARE DINAL $ 305 30$ 100 $ 110$ 200 28 000 12.000 1.500 2.000 300 $110.000 $ 1.000.000 $ 210.000 $ 220,00 $ 160,000 3,000 5.000 10.000 2.500 35.000 $ 1.000.000 $ 210.000 3.226.500S150,000 $ 15$ 200 2.000 $120,000 $301,000 22.000 295.000 2000 20.000 $12.000 15.000 5.000.000 10.000 $ 170,000 500 $1,155,500 $ 400,000 Variable Costs Medictions/Tests Other Total $160.000 $ 30.000 2.500 5 32.500 $ 0,25 7.000 106.250 2.000 $10.000 $10.00 $ 120.000 2.000 $122.000 $ 30,000 200 000 $ 200,000 1.000 250 3 21.000 5.200.250.200.000 $1.000 250.000 1.000.00 10.750 59000 260.000 $100.000 $112.000 $137.500 5 709,250 $ 470,000 $707.000 5 8,000 $ 179,000 $ 27.250 140.000 $20.000 $20,000 $1.500.000 Contribution Margin Fixed Expenses Salines Benefits Consulting Fees 12.GOT 114685 1974 Transportation Otice supplies Depreciation Other Total Fixed Expose TOL311 Band 371.424 522055 $241700 Bridgestone Behavioral Health Center: Cost-Volume-Profit (CVP) Analysis for Planning and Control A. Ronald Kucic University of Denver James K. Sorensen Uniexrsity of Denver Lisa M. Victorovich University of Denver INTRODUCTION Thomas: In reality, securing some outside assistance seems to be a good option to avoid future lossen. Since my training is in puyehology, I don't have the accounting Packaronid to take the task on myself. We need someone who specializes in financial management for nonprofit human service organizations In June of the current year Dr. Thomas Russell, Executive Director, and Susan Smyth, Accountant, at the Bridgestone Behavioral lealth Center were discussing the necessity of gaining a better understanding of how to monitor the Centers operating and financial performance. Located in Cleveland, Ohio, Bridgestone provides prevention, intervention, and treatment services for individuals with substance abuse problems. Bridgestones management is concerned about its financial performance after realizing a low in the prior year although a small profit was projected. Despite managements concern and attention of Bridgestone's profitability troubles the Center's annual budget once again contains a projection for a meager profit of $7.000 sec Exhibiti) BRIDGESTONE BACKGROUND Thomas: According to the financial reports that you have propared, we have been fighting to reach breakenen over the past three years. We have been able to just yet past breakeve recently, but I am worried it was like only a slight variation in operations could theow us into an operating loss. I've been actively involved in managing the Center, and I don't understand how we wishing a lot HISTORY AND MISSION Belgestone is a comiehensive outpatient substance above treatment center located in the Midwest Linted States, Since 1985, Bridgestra has offered tertium of outpatient services, including councing crisis intervention, detoxification, and methadone mantenance. The Bridgestone mission is to be a leader in healing and chancing lives by providing high quality lichavical health care and rehabilitation to all individuak in need. With this mission, the Center promises to advance behavioral cature through the creation of innovative services and enriching the lives of patients one by one Susan: Unfortunately, I have no oversight with respect to monitoring performance since my job is to put the financial and units of service numbers into the acting system as they occut. I am currently working more than 40 hours weck som net te what else lould do. Maybe we can hine cone like a consultant to help us EXECUTIVE DIRECTOR AND SUPPORTING STAFF De Thomas Russell, Lotive Director, hur 30 years of hchavioral health addiction experience and holds a Masters of Social Work Ohio University and a Ph.D. in Clinical Psychology with a speculation on Addiction Counseling from Northwestern University. He is a fellow Im Urinalysis - Laboratory urinalysis services are performed for screening and intervention purposes. This is aimed at helping the patient withstand urges to use drugs. Such monitoring also can provide carly evidence of drug uses that the individual's treatment plan can be properly adjusted. of the American College of Addiction Examiners and in former faculty member of the Ohio University Department of Psychology, Dr. Russell is the author of numerous papers in the field of addictions and presents frequently at major conferences In addition to a highly qualified Executive Director, Bridgestone has an outstanding support staff. They consistently maintain a low client-to-staff ratio with highly trained professionals who are well prepared to support patients in a large array of circumstances. The staff members at Bridgestone are like a family and are defined by their integrity and expertise. They are the key reason for the Center's success in terms of the thousands of lives that they have changed PATIENT TESTIMONIALS Patient and family member testimonials include: "I wanted to say thank you for helping my daughter! I know of lots of therapists...in fact I am one. After 20 years of practice I was very frustrated sending my daughter to treatment until Bridgestone Yes there are therapists, but your folks are THERAPISTS, with a capital "Today is my one year anniversary of sobriety, which would not have been possible without the help of the counslor at Bridgestone. I can't say thank you enough!" "I'm thankful to Bridgestone for the treatment ! ieceived. The road to recovery was not an easy road back still do the same clementary things today that I had to do to achieve recovery I realized that honesty and open-mindedness was a must. I had to surrender all wanted real succes Case Management - Case management serves to monitor patient progress and compliance with recommended addiction treatment plans. Reports to outside parties such as courts, children's protective services, licensing boards, and employers are provided as needed. Group Counseling - Groups are considered the most effective method of breaking patterns of isolation, which is typical of clients during their active addiction stage. During group counseling, clients have the opportunity to examine their thoughts through sharing, listening and receiving feedback from their poers. In a group setting clients also learn to develop social skills, Individual Counseling - Individuals with addictions often consider their problems unique and therefore, are best understood in one-on-one session with their counselor, Individual counseling sessions focus on the patient's progress in the educational process, group participation, druk monitoring compliance, 12-step work, and identification or arcas for improvement to achieve long-term sobriety Crisis Intervention-Due to the volatile nature of the disease of additin, Bridgestone provides crisis intervention or cmorrency counseling for stressful situations that may fead to relapse or to help patients work through cravings of ego that could lead to a rclapec Intensive Outpatient - Outpatient care formes an education and counseling in both individual and group setting to achieve abstinence and to develop a self-responsible plan of addiction recovery for each patient. The programos ciht weeks depending an individual progress and involves three throchoursos per wock. BEHAVIORAL HEALTH AND ADDICTION SERVICES Bridgestone offee 10 services destined to treat a large scay of solistance dependencies from the point of detoxification to supporting bottom scriety and preventing teen Patient Assessment - Patientement is performed ty an addition console who uses a number of methods to detailne if an alcohol or drug use problem truly exists in such anses is citabind, it is necessary to determine the cont or severity of disease, if there is nood for medical detoxification, and the service level of care required to safely and successfully achieve sobriety Medical Somatie - The Kivics cvalates and monitor the needs of adult children and adolescents exhibiting mptonted with a heal Mesilane Fourth Edition (DSM-IV) duhani (DSM.Vis espected in 2013.) The cost of evaluatinga patient's need for psychotropic medications sociated with psychotic disadors, severe mod disorders impubecon donde podmorders, and other psychiatric conditions impan daily functioning SERVICE CONSULTING PLUS, LLC Methadone Maintenance - Patients with an inte addiction are provided with individualued healthcare and medically prescribed methadone to relieve withdrawal symptoms, reduce the opinte craving and bring about a biochemical balance in the body Ambulatory Detoxification - Ambulatory detoxification (also known as outpatient detoxification) is designed to safely detoxify patients from drugs and alcohol without a hospital admission. Ambulatory detoxification as an outpatient treatment has the advantage of causing minimal disruption to a patient's normal day-to-day life. MEDICAID FOR BEHAVIORAL HEALTH SERVICES Ohio kone of the few states that includes behavioral health services in its Medicaid benefits package, although it is not required to do so by foderal law States that cover behavioral health services must clearly define which services are covered by Medicaid. To facilitate receiving payment for Medicaid patients, the types of services Bridgestone offer are consistent with those defined as covered services by the state of Chi When a Modicaid client receives mental health and or alcohol and drug addiction services, the local Alohnt Drug Addiction and Mental Health (ADAMIT Rande Alcohol and Drug Addiction Services (ADAS) Bandar the Community Mental Health CMI Bard rays the provider "The Heart is the reimbursed for the cast by the federal criment which flows to the Heard throw the Ohis Department of Mental llcatch(ODM) and the Oh part of Aland Dr Aiddiction Services ODADAS) teragency with the Ohio Department off and Family Services On the roman Medicaid thatches from both state and time "The Medicaid rcbuscament rates for each so Type and the respective lectif we expected for the uoming yurare din paring the internal hudentory bod pewted in band Kahit pouvely. Since the in the demand for services for the parterly bit of the Medicament in the primary file for ston, mint amintir frate pwy As identified earlier, Bridgestone has ctperienced significant financial stress, and the recutive Director, Thomas inquisitive about how to stabilire financial operations above break-even level. As well, he would like to in the ability to measure and monitor the Center's continuing performance Faced with the lack of internal personnel who could help with this isso, Thomas entscted Sir Cooler Plar, HC, a local consulting firm with a reputation for working with nonprofit orations. The firm is owned and operated by Sheryl Marshall, who is ahoan counting professor at Cleveland State University. The firm specules in the management of governmental and nonprofit organisations At the end of the intal meeting to discuss the situation at Bridgestone, Thomas strand that he didn't simply want to hire Sheryl to get the job done for the current year, but rather thur ho wanted to learn how to me and monitor the financial performance of Renging basis. With this in mind, Sherylplained that Cast Volume-Profit (CVP) analys would be useful to Themes for heathered wimbo information that are als units of She explained that is a fundamentalment conting to that is neful for planning, entland denin making Icexplores important betworn on voimee stanity levels and pede Sheyt asked Teens wide her with Bridgestone's abal bodiary income statement contribution antin format. She explained that the femate the foundation for Panas TV ponse have on the orch war in relatie VICE tity came weefsnes Sherylunden of Bridgestone's operating instrument and the contnbution Oct will rules petaby The three lode a focus on ming service um condary feet and offering of perc nows SERVICE VOLUME Shory's sing for health centers that ich Masa con for menu that herche stod vchof pot at Maghe proctodech cento e Sense levels wch mwing them dollida che Mecanismo The
