Wasatch Medical Clinic has three doctors on staff. The clinic's budget for 2000 is as follows:

1. Is this a static or flexible budget?
2. Prepare a flexible budget showing expected income per doctor at 22,000 , $26,000,30,000$, and 34,000 total patient visits.
3. Interpretive Question: Why does the expected income per doctor increase so dramatically as the number of patient visits increases?

Transcribed Image Text:

Wasatch Medical Clinic Budget for the Year Ended December 31, 2000 Expected number of patient visits Average charge per patient Total revenues.. Budgeted costs: Variable costs: Supplies for each patient ($2 x 26,000). Fixed costs: Utilities... Rent.. Nurses' salaries Malpractice insurance.......... Equipment leases......... Other ... Total fixed costs Total budgeted costs Expected net income. Number of doctors on staff Expected income per doctor.. $ 2.400 9.600 90,000 150,000 25,000 26.000 $25 $650,000 $ 52.000 30,000 307,000 $359.000 $291,000 3 $ 97,000