xpense forecasting. Please conduct a financial analysis using the scenario.

Based on the information provided, put together an expense forecast for 20X1 using the template below: Spending during January- June 20X1 (6 months) Fixed expense items: $210,000 Variable expense items: $1,200,000 One-time expense: $50,000 of fixed expense money was spent on preparing for a Joint Commission survey Procedures performed during January- June 20X1 (6 months) Your department has performed 20,000 procedures during the first six months On November 1,20X1, two new procedure technicians will begin work. The salary and fringe benefit costs for each are $ 96,000.00 yearly.

Description	Fixed	Variable	TOTAL
Adjustments
Add back "one-time " credits.
Deduct "one-time" expenses.
Adjusted total for year-to-date expense
ANNUALIZATION
Divide by months (fixed)	6
multiply by months (fixed)	12
Divide by volume		20000
Multiply by volume		40000
Annualized Amounts
ADJUSTMENTS
Add back "One Time" expenses.
Deduct "One Time" credits.
Expense two new technicians
Expense Forecast as of 12/31/X1

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torralbajhun1Active39 seconds ago

Expense Forecast Analysis for 20X1

1. Spending during January - June 20X1 (6 months)

Fixed expenses: $210,000

Variable expenses: $1,200,000

One-time expense: $50,000 (spent from the fixed expenses)

2. Procedures performed:

20,000 procedureswere performed during the first 6 months.

3. Additional Expenses (New Technicians)

Two new technicians starting November 1, 20X1, with atotal yearly salary + benefits of $96,000 each, which amounts to$192,000 yearly.

Expense Forecast Calculation:

Description:

Description	Fixed	Variable	TOTAL
Spending January - June 20X1	$210,000	$1,200,000	$1,410,000
Adjustments:
Add back "One-time" credits
Deduct "One-time" expenses	-$50,000		-$50,000
Adjusted total for year-to-date expense	$160,000	$1,200,000	$1,360,000
ANNUALIZATION
Divide by months (fixed)	6
Multiply by months (fixed)	12
Divide by volume		20,000
Multiply by volume		40,000
Annualized Amounts
Fixed expenses (Annualized)	$320,000
Variable expenses (Annualized)		$2,400,000
Total Annualized Expense	$320,000	$2,400,000	$2,720,000
ADJUSTMENTS
Add back "One-time" expenses	$50,000		$50,000
Deduct "One-time" credits
Expense for two new technicians	$32,000 (for 2 months of Nov-Dec)		$32,000
Total Expense Forecast as of 12/31/X1	$402,000	$2,400,000	$2,802,000

Explanation of Calculations:

Fixed Expense Adjustments:

The initial fixed expenses for 6 months were $210,000. After deducting the one-time $50,000 expense for the Joint Commission survey, the adjusted 6-month fixed expenses are $160,000.

Annualized Fixed Expenses:

To annualize the fixed expenses, we divide by 6 months and multiply by 12 months. The annualized fixed expenses become $320,000.

Variable Expenses:

The variable expenses for 6 months were $1,200,000. To annualize, since the number of procedures is projected to double from 20,000 to 40,000 in the second half, we multiply the variable expenses by 2, resulting in $2,400,000.

New Technicians' Expenses:

The new technicians start on November 1, which means their salary will only affect the last two months of the year (November and December). Two months of salary for two technicians at $96,000 yearly is $32,000.

Final Expense Forecast:

The total expense forecast for the year ending 12/31/X1 is $2,802,000, with $402,000 in fixed expenses and $2,400,000 in variable expenses.

Explanation:

Step-by-Step Explanation

Step 1

Initial Spending (January - June 20X1)

Fixed Expenses: The total fixed expenses incurred for the first six months of 20X1 were $210,000.

Variable Expenses: Variable expenses for the first six months totaled $1,200,000, corresponding to the 20,000 procedures performed.

One-time Expense: A one-time expense of $50,000 was spent on a Joint Commission survey, reducing the fixed expenses.

Step 2

Adjusted Year-to-Date Total (January - June 20X1)

Adjusted Fixed Expenses: After subtracting the one-time $50,000 survey expense from the initial fixed expenses of $210,000, the adjusted fixed expense total is $160,000.

Total Year-to-Date Expense: Adding the adjusted fixed expense of $160,000 to the variable expense of $1,200,000 gives a total of $1,360,000 in expenses for the first half of the year.

Step 3

Annualization Process

To forecast the total expenses for the entire year (12 months), we annualize the costs:

Annualizing Fixed Expenses: Since the $160,000 is for 6 months, to project the fixed expenses for the entire year, we divide by 6 and multiply by 12

AnnualizedFixedExpenses=160,000612=320,000

Annualizing Variable Expenses: The variable expenses are directly tied to the number of procedures. Since the volume of procedures is expected to double in the second half (from 20,000 to 40,000), we multiply the variable expense by 2

AnnualizedVariableExpenses=1,200,0002=2,400,000

Step 4

Adjustments for New Technicians

New Technician Costs: Two new technicians will start on November 1, 20X1. Their combined annual salary is $192,000, but since they only work for two months in 20X1, we need to prorate the salary. The expense for two months is calculated as follows:

Twomonthssalary=192,000122=32,000

Step 5

Final Expense Forecast

Total Fixed Expenses (Annualized + Adjustments): The total fixed expenses for 20X1 are the annualized fixed expenses plus the two-month salary of the new technicians

TotalFixedExpenses=320,000+32,000=352,000 The total expense forecast is the sum of the annualized fixed expenses and the variable expenses

TotalExpenseForecast=352,000+2,400,000=2,802,000

Thus, the projected total expense forecast for the year ending 12/31/X1 is$2,802,000.