Question

Discussion Week 4

As the office manager of a large group practice you have two computational tasks to undertake today.

1. You need to run a Depreciation Computation: Units-of-Service

Using the format in Table 9–1, compute Units-of-Service Depreciation using the following assumptions:

Cost to be depreciated = $50,000

Salvage value = zero

Total units of service = 10,000

Units of service per year: Year 1 = 2,200; Year 2 = 2,100; Year 3 = 2,300; Year 4 = 2,200; Year 5 = 200

The straight-line depreciation method applied to a fixed asset costing $50,000 with a 5 years useful line and no salvage value.

The depreciation expense would thus equal to ($50,000/5years= $10,000).

2. Next you need to calculate the FTEs needed next year to Annualize Staffing

To annualize your staffing plan, you need to convert the staff’s net paid days worked to a factor. The office is open and staffed seven days a week, due to your contracts with two managed care plans. The group practice pays for 8 holidays, 5 sick days, and 1 education day each year. An employee must work one full year to earn 5 vacation days. An employee must have worked full time for three full years before earning 10 annual vacation days. Because the turnover is so high, nobody on staff has earned more than 5 vacation days.

Required

   1. Compute Net Paid Days Worked for a full-time employee in the physicians’ group.

   2. Convert Net Paid Days Worked to a factor so you can annualize your staffing plan.

Assignment Exercise 9-5
Units-of-Service (Units-of-Production) Depreciation
	Cost (to be Depreciated)	Units-of-Service per Year	x	Depreciation per Unit	Annual Depreciation Expense	Accumulated Depreciation (Reserve for Depreciation)	Net Remaining Undepreciated Cost               (Net Book Value)
	$50,000
Year 1		2,200		10,000
Year 2		2,100		10,000
Year 3		2,300
Year 4		2,200
Year 5		200
	Total Units

Answer 1

According to given P. No. 1 Book value units of Depreci | Acc. Book value year year start activity activity -ation year end 50,000 9,200 12,222 12,922 37,778 37,778 2100 11,667 93,889 96,111 3 26,111 2,300 12,778 36,667 13,333 4 니 13,333 2,200 12,922 148,889 1,111 5 5 1,111 200 1,111 50,000 9,000 Depreciation per units (50,000_o) 9,000 5.5555 per unit of activity

Pig 364 Category days Total days : business year lees a days off per week number of paid days per year les: paid days not worked lou 360 Holidays sick days Education days Vacation days Tolal non productive days o -.us и 19 gul 1. Net productive days factal 364 241 1.51037 Total days in the businey year divided by not paid days worked)