Part 2 Budget Analysis Table 1 includes PCS's proposed budget for 2018. Using this as a basis, develop a revenue and expenses budget for each PCS center. Note that professional reading fees and laboratory expenses are variable costs that need to be allocated based on the type of visit. Generally, an occupational health visit (Categories 8 and 9 on Tables 2 and 3) including all physicals has reading and laboratory costs 1.4 times what a general medical visit incurs (Category 1, 2, or 3). For each line item in the budget, indicate whether the item is a fixed or variable expense and the basis of allocation or assignment for the budget for each center. Each center is expected to generate approximately the same profit margin. Given your analysis, will it? Should management change its expectations regarding average revenue per visit by center?

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Proposed Operational Budget for 2018 Patient Revenue 2,424,000 Deductions 198,768 Net revenue 2,225,232 Expenses Salaries and wages 1,181,200 Staff benefits 425,230 Administrative expenses 21,500 Advertising 3,000 Collection fees 1,800 Consultants 3,750 Computer support 34,000 Equipment leases 4,100 Insurance 28,100 Laboratory 49,000 Laundry and housekeeping| 13,500 Legal/audit 8,450 Medical supplies 64,750 Printing and postage 11,000 Professional fees 28,000 Rent 78,500 Repairs 3,500 Telephone 11,000 Utilities 19,200 Depreciation 73,000 Bad debt expenses 10,400 Total expenses 2,072,980 Income (loss) before taxes 152,252 Taxes 60,901 Income (loss) after taxes 91,351 NOTE: Budget parameters Alpha Beta Total Visits, budgeted 7,500 5,100 12,600 Average revenue per visit ($) with no increased basic visit fee 160 240 Proposed Operational Budget for 2018 Patient Revenue 2,424,000 Deductions 198,768 Net revenue 2,225,232 Expenses Salaries and wages 1,181,200 Staff benefits 425,230 Administrative expenses 21,500 Advertising 3,000 Collection fees 1,800 Consultants 3,750 Computer support 34,000 Equipment leases 4,100 Insurance 28,100 Laboratory 49,000 Laundry and housekeeping| 13,500 Legal/audit 8,450 Medical supplies 64,750 Printing and postage 11,000 Professional fees 28,000 Rent 78,500 Repairs 3,500 Telephone 11,000 Utilities 19,200 Depreciation 73,000 Bad debt expenses 10,400 Total expenses 2,072,980 Income (loss) before taxes 152,252 Taxes 60,901 Income (loss) after taxes 91,351 NOTE: Budget parameters Alpha Beta Total Visits, budgeted 7,500 5,100 12,600 Average revenue per visit ($) with no increased basic visit fee 160 240