BUDGET FORECASTING PROJECT

This budgeting exercise requires basic math skills. You should have already listened to the presentation about budgeting before completing this exercise.

You have just attended the kickoff meeting with the VP of Finance, Mr. Banks. You need to start

forecasting the expense budget for the coming fiscal year. Based on the assumptions given below, fill in the highlighted blanks on the mini-budget worksheet below. This is budgeting using the historical approach.

1. The cost of benefits is expected to rise by 2% across the board; at this point, nothing different

should be forecasted for salaries. This one has been done for you as an example.

2. An inflation rate of 5% should be added to all office supplies.

3. You have already been told by your dictation company that the maintenance contract will

increase by 3%.

4. The coding outsourcing company is raising their rates by 30 cents per discharge. You do not

expect the number of records being coded by the outsourcing company to rise, which is

$32.00/record.

5. You have a total of 4 credentialed individuals in your department, and you pay for their annual

dues. One of them, Jane, is a CPC, and she has told you that the $150.00 annual dues are being raised to 160.00; the others will not change.

6. Due to budget cuts, the continuing education budgets must be cut by 25%

Expense	FY 2023 actual	FY 2024 forecast
Salaries & benefits	$480,000.00	$489,600.00 (480,000 x 1.02)
Continuing education	$3,000.00	$2,250
Maintenance contracts	$95,000.00	$97,850
Repairs	$1,000.00	$1,000.00
Storage	$55,000.00	$55,000.00
Office Supplies	$10,350.00	$10,867.50
Professional dues	$660.00	$670.00
Travel	$5,000.00	$5,000.00
Outside services (including outsourcing)	$89,000.00	$89,834.38