Case $9\mathrm{.}5$: Immunization Clinic Inc.

Key concept: Determining volume to achieve target profit for a taxable entity

D$.$

r$.$ Brandon started a for$-$profit immunization clinic in January $2013.$ The clinic was founded with the vision of providing five types of immunization injections for a low price of $$10$ each, with the aim of making them affordable to all. Immunization Clinic Inc. is located in a small building rented at a cost of $$1,000$ per month. The clinic hired one nurse to work full$-$time and two college students to work $20$ hours per week. A certified public accountant $($CPA$)$ also was hired at a cost of $$1,000$ per month to handle billings, collections, payroll, payments, financial records, monthly financial statements, and tax returns. Necessary equipment was purchased for cash. Dr$.$ Brandon has noticed that expenses for medical supplies and advertising have varied while the remaining expenses have been relatively constant.

Between $2013$ and $2015,$ the patient volume doubled. Profits have much more than doubled. Dr$.$ Brandon does not understand why profits have gone up so much faster than patient volume. The CPA prepared the following forecasted income statement for $2016$ :

$\backslash$table$[[\backslash$table$[[$Immunization Clinic Inc.$],[$Projected Income Statement$],[$for Year Ended December $31,2016]]],[$Revenues$,,,$$$480,000$