Question - Nova medical Center is located in Florida, The clinic is administered as a separate department within the hospital. It has its own staff and maintains its own records. An analysis of past operating data for the out-patient clinic reveals the following:
1. Staff: Three 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 a cost of $4,000 per month
2. Facilities: Monthly facility costs, including depreciation of $2,000, total $6,000
3. 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 a minimum ending inventory of $3,000, which is also the desired inventory at the end of August.
4. Payments: All staff and maintenance expenses are paid in the month the cost is incurrent. Supplies are purchased at cost directly from the hospital with an immediate transfer of cash from the clinic toe the hospital.
5. Collections: The average bill for services rendered is $100. Of the total bills, 40 percent are paid in cash at the time the service is rendered, 10 percent are never paid, and 30 percent of the bill will be paid in cash by insurance two months after services are rendered. The remaining 20 percent will be disallowed by insurance generally.
6. May 30 status: At the end of May, the clinic had $20,000 in cash and supplies costing $3,000
7. Budgeted patient visits for June, July, and August are 2,000, 3,000, and 4,000 relatively.
Please prepare a supplies purchases budget and cash budget for June and July.