(Loa) Round Lake Medical Center is located in a summer resort community. During the summer the center operates an outpatient clinic for the treatment of minor injuries and illnesses. is administered as a separate department within the hospital. It has its own staff and ma own financial records. All patients requiring extensive or intensive care are referred to other departments. P21-38. Budgeting Purchases, Revenues, Expenses, and Cash in a Service Organization months nd illnesses. The clinic staff and maintains its to other hospital Staff: Seven full-time employees with total monthly salaries of $42,000. On a monthly basis, one additional staff member is hired for every 500 budgeted patient visits in excess of 3,000, at $4,000 per month. An analysis of past operating data for the out-patient clinic reveals the following nthly basis, one at a cost of Facilities: Monthly facility costs, including depreciation of $2,000, total $8,000. Supplies: The supplies expense averages $10 per patient visit. The center maintains an end-of month supplies inventory equal to ten percent of the predicted needs of the following month, with minimum ending inventory of $3,000, which is also the desired inventory at the end of August Additional variable patient costs, such as medications, are charged directly to the patient by the hospital pharmacy Payments: All staff and maintenance expenses are paid in the month the cost is incurrent. Su are purchased at cost directly from the hospital with an immediate transfer of cash from the clinic pplies aratl tioue beuhe h an innedian cash account to the hospital cash account. Collections: The average bill or services rendered is $60. Of the total bills, 40 percent are paid in ash at the time the service is rendered, 10 percent are never paid, and the remaining 50 percent are covered by insurance. In the past, insurance companies have disallowed 20 percent of the claims filed and paid the balance two months after services are rendered. May 30 status: At the end of May, the clinic had $12,000 in cash and supplies costing $3,000. May 30 status: At the end of May, the clinic had $12.00 Budgeted patient visits for next summer are as follows