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As of January 1, 2009 UND Family Health Service Center had 8 employees with a total annual salary budget of $400,000. The annual maintenance cost was estimated at $80,000. Based on 2008 data, the monthly patient service in 2009 was forecasted to be 180 patients per month. For each new patient serviced, the average variable cost incurred (e.g. paperwork, treatment materials, equipment depreciation, utility consumption) was estimated at $10, and average revenue per patient was projected to be $230.
Question: Based on the above information, do you think the center manager can balance annual costs and annual revenues? Explain. What would you suggest to the manager?
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