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

Ko concopt: 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 $20$ hoursper 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 faser 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$,,,$$$480,000,,],[$Expenses$,,,,,],[,$Medical supplies,$$160,000,,,],[,$Physician salary,$60,000,,,],[,$Nurse salary,$40,000,,,],[,$Hourly wages,$20,000,,,],[,$Payroll taxes$-$benefits,$36,000,,,],[,$Rent,$12,000,,,],[,$Professional fees,$12,000,,,],[,$Equipment depreciation,$5,000,,,],[,$Utilities,$6,000,,,],[,$Advertising,$20,000,,,],[,$Miscellaneous expenses,$15,000,,,],[,,,($continued$),,],[,,,,,],[,,,,,]]$

$($continued$)$

$150$

Healthcare Applications: A Casebook in Accounting and Financial Management

$\backslash$table$[[,,386,000],[$Total expenses,,,$94,000],[$Income before income taxes,,,$23,500],[$Income tax expense,,,$$70,500$