The Stratton Township Park - MHA 5001 Unit VII Homework

The Stratton Township Park – MHA 5001 Unit VII Homework

MHA 5001 Unit VII Homework

Please read “The Stratton Township Park” on pages 308-311 in your course textbook. Complete questions 1-5 listed below and found on pages 310-311 using the information found in the case study and any of the required reading. Compile your answers in a Word document, and upload it in Blackboard.

Question 1:

Prepare an annual program budget for the Stratton Township Park including golf operations; the pool; concerts; other park activities including tours, nature visitors, and general concessions; and administrative costs. Show the line-item details for each function by natural account and summarize the budget for the park as a whole.

Because of the current fiscal situation, the Stratton Township needs to reduce its operating costs. As usual, the park is on the list of targeted operations. As the finance director for the township, you have been asked to work with the park’s manager to explore possible options.

Question 2:

Based on the information in the budget, find the break-even green fees for the golf course and the break-even admissions charges for the pool. You may assume that the volume of users will not change with increases in pricing. You may also assume that the course will operate for a full 130 days.

a) Do both break even analyses based on the cost of delivering services with and without the allocated management salaries.

b) Do you think the park can realistically charge these fees to park users? What might the consequences of raising fees be economically, politically, and in a public relations sense?

Question 3:

The park manager wants to know whether it makes sense to shut down one or more of the operations at the Stratton Township Park. Determine the impact of shutting down the golf course, the pool, the concert series, and the tours, and show the overall marginal impact of making each of these changes. Be sure to include all marginal revenues and all marginal expenses in your calculations.

Question 4:

After completing these analyses, the manager has decided to recommend three changes to the Park’s budget.

First, he plans to increase green fees for golf to $5 above the break-even price excluding allocated management costs and rounded to the next highest multiple of $.50. Since competitive private clubs in the region cost $100 or more for a round of golf, he does not believe that an increase in price will result in a decline in the number of golfers using the course.

Second, he wants to raise pool admission charges to $4.50. Given the demographics of those who use the pool, he believes that raising prices by $1.00 will result in a 5% drop in attendance.

Third, he wants to eliminate three of the concerts the township had planned for the next year.

Prepare a revised budget for the Stratton Township Park reflecting these changes. Will these budget modifications meet the township’s goal of reducing the subsidy it would have given to the park in the next fiscal year by 20%?

Question 5:

After receiving your analysis of the impact of eliminating the concerts and raising green fees and pool admission charges, the park manager has asked you to come up with some additional proposals for meeting the township’s subsidy reduction goal. What would you recommend?

MHA5001 Unit VII Assessment

Question 1

Donations in cash are easy to measure. What is the treatment that not-for-profit organizations use for donated goods and services?

Your response must be at least 75 words in length. You are required to use at least your textbook as source material for your response. All sources used, including the textbook, must be referenced; paraphrased and quoted material must have accompanying citations.

Question 2

How does the accounting industry define a not-for-profit organization and a voluntary health and welfare organization (VHWO)?

Question 3

Distinguish between the way investor owned and not-for-profit healthcare organizations treat investments.

Question 4

To what extent do not-for-profit organizations have the ability to choose among the following:

a. using depreciation,

b. ignoring depreciation,

c. maintaining building and equipment on the balance sheet at their original cost,

d. showing such assets at their market value,or

e. completely charging such assets such as expenses in the year acquired?

MHA 5001 Unit VII Discussion Board

Chapter 11 did not specifically discuss whether healthcare organizations must depreciate their buildings and equipment. Do you believe that such depreciation is or is not required? Why?

The Stratton Township Park – MHA 5001 Unit VII Homework

MHA 5001 Unit V Homework Assignment

On page 251 in your textbook, please complete problems 7-29 through 7-33 listed below for convenience. Compile your answers in a Word document, and upload it in Blackboard.

Answer the following problems:

7-29. Millbridge Hospital buys its supplies in bulk and has recently switched vendors. The first purchase Millbridge made was for 500 boxes of gauze at $3.46 a box. The purchase had payment terms of 2/15 N/30. Millbridge earns four percent on its idle cash. Should it take the discount or not? Justify your answer by showing calculations. (Refer to Appendix 7-B to solve this problem.)

7-30. Meals for the Homeless usually experiences seasonality in its cash balances. In December, contributions from donors increase its cash balances, and then these balances are used throughout the following year. By the fall, Meals for the Homeless has a tight cash flow. It has a line of credit with its bank, which allows it to draw up to $500,000 at seven percent interest per year. During 2013, Meals for the Homeless draws down $135,000 on October 1 and repays it at the start of business on January 3, 2014—exactly 94 days later. How much should it pay back on January 3, and how much of that is interest?

7-31. Meals for the Homeless has many sources of income, but they pay Meals very differently. Specifically, Meals has contracts with the city, county, and state to provide food services. In addition, Meals has contracted with a private foundation to augment its foods with more healthful options. The city owes Meals $400,000, half of which is current, one-quarter is more than 30 days but less than 61 days old, 15% is between 61 and 90 days old, and the remainder is more than 91 days old. The county owes Meals $900,000, only one-third of which is current, another one-third is more than 30 days but less than 61 days old, and the remainder is more than 90 days old. The state owes Meals $1.5 million, 40% is current, 30% is between 30 and 60 days old, 20% is between 61 and 90 days old, and the remainder is more than 91 days old. The foundation owes Meals $150, 000, of which half is current and the other half is more than 30 days but less than 61 days old. Prepare an accounts-receivable aging schedule for Meals by total dollars and percent.

7-32. Millbridge Hospital receives earned income from several sources: Medicare, Medicaid, private insurance, and self-pay customers. The federal government owes the hospital $7 million, 60% is current, 30% is between 31 and 61 days old, and the remaining 10% is between 61 and 90 days old. The state owes the hospital $5 million for Medicaid, 40% of which is current, 30% is between 31 and 60 days old, 20% is between 61 and 90 days old, and the remainder is more than 91 days old. Private insurance owes the hospital $4 million, half of which is current, 25% is between 31 and 60 days old, and the remaining percent is more than 91 days old. Self-pay customers owe $1 million, 30% is current, 40% is 31 to 60 days old, 10% is 61 to 90 days old, and the remainder is more than 91 days old. Prepare an accounts-receivable aging schedule by total dollars and by percent.

7-33. Millbridge Hospital buys 10,000 boxes of latex gloves every year. Each box costs the hospital $7 dollars. The cost to place an order for the gloves—which covers the employee staff time, shipping costs, the hospital’s receiving center for inventorying, for example—is estimated at $50 dollars per order. Carrying costs (for storing the boxes, verifying the inventory periodically, etc.) are estimated at 50 cents per box per year. Millbridge uses a six percent interest-cost assumption in its calculations. How many boxes should be ordered at a time? How many orders per year should there be? What are the total ordering and carrying costs at the EOQ (economic order quantity)? Contrast these costs at the EOQ to the total cost if all boxes were simply ordered at the start of the year. (Refer to Appendix 7-A to solve this problem.)

MHA5001 Unit V Discussion Board Question

Part 1: Why is it important to collect accounts receivable as soon as possible?

Part 2: Do you believe the Sarbanes-Oxley Act provides enough protection for whistle-blowers within an organization? Why, or why not? Be sure to respond to at least one other student on the board.

The Stratton Township Park – MHA 5001 Unit VII Homework