DATA INPUT
Total annual office visits 48,000
1/2 Hour appointments 80%
Average rate for 1/2-hour visits 60$
1 Hour appointments 20%
Average rate for 1-hour visits 105$
Revenue collected during month when services are rendered 90%
Revenue collected the month following when services are rendered 10%
Dental associates earn 90$ per hour
Cost-driver rates are as follows:
Patient registration and records 3.00$ per office visit (of any length)
All other overhead and administrative expenses 7.50$ per direct professional labor hour
SOLUTION
1. Direct professional labor budget schedule for the month of June:
Professional services in June:
1-hour visits 20% x4,000 x 1 hr. = 800 hours
2. Cash collections during June for professional services rendered during May and June:
May June
3. Overhead and administrative expense budget schedule for the month of June:
1/2 hour visits 4,000 x 80% =3,200 3,200
Total billings during the month 276,000$ 276,000$
Percentage of month’s billings collected during June 10% 90%