One of the owners of the Fleming Medical Group recently attended a conference on medical practice management, learned of flexible budgeting, and believes it can help the practice better manage its revenues and expenses. Using the table in Problem 14-3, BUILD a flexible budget based on 2022 year to date actual expenses and visits, a 4% inflation factor for each line item, and 52,560 forecast patient visits in 2023. What are the total budget, projected net income, and profit margin? Did net income and profit margin increase from the incremental budget prepared in Problem 14-3?

	2021	2022 YTD Actual	2022 YTD Budget	Budget 2023
Revenue	$4,885,987	$2,964,750	$2,950,000
Operating Expenses
Physician salaries	$960,000	$585,306	$576,800
Nursing staff salaries	1,380,000	857,157	829,150
Mgt and clerical salaries	780,000	466,971	468,650
HE IS	238,680	143,397	143,407
Health Insurance	390,000	238,760	234,325
Retirement	124,800	76,763	74,984
Unemployment	31,200	18,323	18,746
Medications	148,152	91,687	89,015
Medical instruments	102,792	64,287	61,761
Bandages, gauze	57,468	34,140	34,529
Gloves, gowns	40,416	24,476	24,283
Sterile wipes	26,820	15,780	16,114
Office supplies	115,200	69,388	69,216
Cleaning supplies	39,048	23,103	23,461
Rent	144,000	89,251	86,520
Maintenance	13,764	11,245	8,270
Electricity	10,788	6,684	6,482
Gas	18,504	11,215	11,118
Water and sewage	6,756	4,225	4,059
Telephone	3,228	2,004	1,939
Housekeeping	36,000	21,694	21,630
Travel/meetings/meals	7,908	4,744	4,751
Prof. insurance	22,380	15,669	13,447
CME	29,856	17,994	17,938
Other expenses	57,732	35,955	34,687
	$4,785,492	$2,920,218	$2,875,282
Total visits	51,986	30,331	30,672	52,560

Problem 14.3

14.3

The Fleming Medical Group has had a modest net income recently, and the first six months of 2022indicate that their profit margin may be less than 2% if current performance continues. The owners want to put greater emphasis on budgeting to improve financial performance. Using the following table create an incremental budget for the practice based on 2022 year-to-date actual expenses and a 4% inflation factor for each line item. What are the total budget, projected ne income, and profit margin?