Construct a pro forma income statement for the first year and second year for the following assumptions: Units of Sales in Year 1: 110,000 Price per Unit: $11 Variable cost per unit: 25% Fixed Costs: $129,000 Income taxes: 20% Interest Expense: $170,000 In year 2, Price per unit increases to $13.50, and unit of sales increases by 4%, all other assumptions remain the same.
Construct a pro forma income statement for the first year and second year for the following assumptions: Units of Sales in Year 1: 110,000 Price per Unit: $11 Variable cost per unit: 25% Fixed Costs: $129,000 Income taxes: 20% Interest Expense: $170,000 In year 2, Price per unit increases to $13.50, and unit of sales increases by 4%, all other assumptions remain the same.
Related questions
Tallahassee Clinic projected the following budget informationfor 2018:
Total FFS Visit Volume | 90,000 visits |
Payer Mix: | |
Blue Cross | 40% |
Celtic Insurance Company | 60% |
Reimbursement Rates: | |
Blue Cross | $25 per visit |
Celtic Insurance Company | $20 per visit |
Variable Costs â Resource Inputs: | |
Labor | 48,000 total hours |
Supplies | 100,000 total units |
Variable Costs â Input Prices: | |
Labor | $25 per hour |
Supplies | $1.50 per unit |
Fixed Costs (overhead, plant, and equipment) | $500,000 |
Construct Tallahassee Clinicâs static operating budget for 2018.(See Exhibit 8.3, page 283. Note that there are four componentsthat need to be included: Volume Assumptions, Revenue Assumptions,Cost Assumptions, and the Pro Forma Profit and Loss or P&Lprojected Statement.)
Problem 1
Tallahassee Clinic projected the following budget informationfor 2018:
Total FFS Visit Volume | 90,000 visits |
Payer Mix: | |
Blue Cross | 40% |
Celtic Insurance Company | 60% |
Reimbursement Rates: | |
Blue Cross | $25 per visit |
Celtic Insurance Company | $20 per visit |
Variable Costs â Resource Inputs: | |
Labor | 48,000 total hours |
Supplies | 100,000 total units |
Variable Costs â Input Prices: | |
Labor | $25 per hour |
Supplies | $1.50 per unit |
Fixed Costs (overhead, plant, and equipment) | $500,000 |
Construct Tallahassee Clinicâs static operating budget for 2018.(See Exhibit 8.3, page 283. Note that there are four componentsthat need to be included: Volume Assumptions, Revenue Assumptions,Cost Assumptions, and the Pro Forma Profit and Loss or P&Lprojected Statement.)
EXHIBIT 8.3 PAGE 283:
- Volume assumptions:
- FFS 36,000 visits
- Capitatedlives 30,000 members
Number ofmember-months 360,000
Expected utilization per
Member-month 0.15
Number ofvisits 54,000 visits
- Total expectedvisits 90,000 visits
- Revenue Assumptions:
- FFS $25 per visit
X 36,000 visits
$900,000
- Capitatedlives 3PMPM
X 360,000 actual member months
$1,080,000
- Total expectedrevenues $1,980,000
- Cost Assumptions:
- Variable costs:
Labor $1,200,000 (48,000 hrs at $25/hr)
Supplies 150,000 (100,000 units at $1.50/unit)
Total variablecosts $1,350,000
Variable cost pervisit $ 15 ((1,350,000/90,000)
- Fixed costs:
Overhead, plant, &equip $500,000
- Total expectedcosts $1,850,000
- Pro Forma Profit and Loss (P&L) Statement:
Revenues:
FFS $900,000
Capitated 1,080,000
Total $1,980,000
Costs:
Variable:
FFS $540,000
Capitated 810,000
Total $1,350,000
ContributionMargin $630,000
FixedCosts 500,000
Projectedprofit $130,000
