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Metropolitan Dental Associates is a large dental practice in Chicago. The firm s controller is preparing the budget for the next year. The controller projects
Metropolitan Dental Associates is a large dental practice in Chicago. The firms controller is preparing the budget for the next year. The controller projects a total of office visits, to be evenly distributed throughout the year. Seventy percent of the visits will be halfhour appointments, and the remainder will be onehour visits. The average rates for professional dental services are $ for halfhour appointments and $ for onehour office visits. Ninety percent of each months professional service revenue is collected during the month when services are rendered, and the remainder is collected the month following service. Uncollectible billings are negligible. Metropolitans dental associates earn $ per hour.
Metropolitan uses activitybased budgeting to budget office overhead and administrative expenses. Two cost drivers are used: office visits and direct professional labor. The costdriver rates are as follows:
Patient registration and records $ per office visit of any length
All other overhead and administrative expenses $ per direct professional labor hour
Required:
Prepare the directprofessionallabor budget schedule for the month of June.
Prepare the budget schedule for cash collections during June for professional services rendered during May and June.
Prepare the overhead and administrative expense budget schedule for the month of June.
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