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We are looking at a community mental health facility so we know that we can not cut the psychiatrist or the social workers. Their total salaries are $202,000 a year. The administrator also does not need to be cut. ($60,000) These people are key members of the facility. These costs would be considered capacity costs. They are fixed costs that are needed to attain the level of output needed. (Horngren, Sundem, and Stratton, 2005) Other costs that do not need to be cut are supplies, accounting and billing, custodial, and security. The total of these costs are $75,000. Costs have know been cut to accommodate a total annual budget of $337,000 (Worst case scenario)...
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Common topics in this essay:
- Total Quality Management
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- How Do Variable Costs And Fixed Costs Differ?
- Worst Case Scenario
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