You have the following data for January 1 - May 31 of this fiscal year with which to an expense forecast. This fiscal year runs from January 1 to December 31 of 20X5.Fixed expenses were $2,450,000 and variable expenses were $355,000. During the first five months of the year, $80,000 of fixed expense was spent on a health department survey. Another adjustment to fixed expenses occurred in April when a vendor refunded $20,000 for prepaid services that were never provided last year. Volume through May 31 has been 200,000 visits.

Assume the following:

• Monthly volume will be 4,000 visits per month higher in the remaining part of the year (6/1/20X5 to 12/31/20X5) compared to the average monthly volume of the first five months.
• Three new practitioners are expected to join the staff on October 1^st.
• Each new practitioner earns $125,000 per year, inclusive of fringe benefits.

Calculate the fixed, variable, and total expense forecast for 20X5.

Answer rating: 100% (QA)

Step 1 Calculate the remaining months expenses Fixed Expenses Fixed expenses for the first 5 months ... View the full answer