Question

One of the tasks you face as a manager, especially if your organization makes frequent business transactions, is that of preparing a budget. A budget is a tool used for planning and controlling your financial resources. It is a guideline for your future plan of action, expressed in financial terms within a set period of time. A budget does not have to be complex. However, it should support the strategic plan for the organization. We will need resources to achieve our goals and objectives.

Imagine you are the healthcare administrator for Baptist Healthcare Services (BHS) Inc. Forthis project, focus on the operating budget. An operating budget shows the Baptist Healthcare Services (BHS) Inc., projected revenue and associated expenses for an upcoming period—usually the next year. An operating budget starts with revenue, and then shows each expense type. This includes variable costs, or the costs that vary with sales, such as the cost of raw materials and production labor. The operating budget includes fixed costs, such as the monthly rent on office space or the monthly payment for a photocopier lease. The budget also includes operating expenses, such as interest on business loans, and the non-cash expense of depreciation. These items enable the company to compute its projected net income and net profit percentage.

• Using the information provided develop a one-year operating budget using excel for the Baptist Healthcare Services (BHS) Inc., which will include operating revenues and expenses.

Answer 1

Please find department wise budget and cost estimates for BHS

Note: Figures are only estimates

Operating Budget
			Cardiology	Maternity	Accident and emergency		Paediatircs
Revenues
	Inpatient Services
		Blood Transfusion	150		100
		Joints Replacement			50
		Cardiac Transplantation
		Delivery		50
	Outpatient services
		Consultation					25
		X Ray					20
		Eye sight test
		Physiotherapy
		Stitches
Costs
	Direct Materials
		Syringe	2.5		2.5
		Oral medications	5	2	3		5
		Intervenes	5		5
		Disposable tools	10	5	5		1
		Needles	2	2	1		2
		Cotton	1	1	1		3
		operation supplies	2	3	2
	Direct Labor
		Physician Fee					10
		Surgeon's fees	20	5	20
		Doctors	5	3	5
		Nutritionist		2			2
Operating expenses
	Medical staff salary
		Nurses						2
	Administrative staff salaries
		Security						0.5
		Receptionist						0.5
		Chefs						1
		Cleaners						2
		porters						1
		laundry						2
	Utilities
		Machinery lease rent						10
		office space rent						20
		Elecricity						15
		Gas						1
		Water						2
	IT Support							1
	Marketing							0.5
	Depreciation and amortisation							2
	Insurance costs							1
	Finance costs							2
		Borrowing costs
		Interest costs
		Processing fees
	Taxes							0.5