Unit 1: Team Project Guidelines: My Drive - Google Drive X + Group Project - Google Sheets X & Healthcare Applications: A Case X Search Results | Course Hero X Homework Help - Q&A from On X CA A https://www.scribd.com/read/428150221/Healthcare-Applications-A-Casebook-in-Accounting-and-Financial-M: ... E E & SCRIBD Q Aa . . . Key concept: Preparing a departmental budget when given volume estimates Imaging materials $300,000 The Westside Hospital radiology department is preparing a budget for the fol- Overhead $500,000 lowing year. A major budget category is hand, foot, and forearm imaging. Current- Total $1,225,000 year admissions for these imaging categories totaled 2,000, which breaks down as The department's labor expenses are expected to increase 5 percent next year follows: due to an anticipated across-the-board pay raise. Imaging materials expenses are expected to increase 6 percent, primarily due to increases in precious metals costs. The department's overhead expenses are forecasted to remain constant for the next year. In addition to their individual cost increases, all three expenses are expected to increase by 10 percent due to the overall volume increase. The radiology department head thinks there will be a 10 percent increase in vol- Assignments ume for next year. This additional volume is expected to have the same procedure 1. Prepare a budget for the next year by completing the following steps: mix as the current year. Rates are not expected to change. The controller projects the payer analysis to be 50 percent Medicare (reim- a. Calculate the current volume for each imaging procedure by multiplying bursement rate = 70 percent of charges), 20 percent Medicaid (reimbursement rate the total volume of 2,000 by the proportion for each procedure. = 60 percent of charges), 20 percent managed care (reimbursement = 70 percent b. Increase the current volumes by 10 percent to get the projected volume for of charges), and 10 percent self-pay (full charges, but 20 percent of self-pay results each procedure. in charity care). These three procedures account for 20 percent of the radiology department's c. Multiply the projected volume for each procedure by the rates to get gross current $1,225,000 labor, imaging materials, and overhead expenses, which can be projected revenues. broken down in the following manner: d. Use the reimbursement rates to convert gross projected revenue to net Labor $425,000 projected revenue. 2 pages (2 min) left in this chapter 88% read