Case study of Dr. Stephanie White - Essay Example

Running Head: MANAGERIAL ACCOUNTING Managerial Accounting of Managerial Accounting In the provided casestudy of Dr. Stephanie White, the Chief Administrator of Uptown Clinic, a community mental health agency, concerned about the dilemma of coping with reduced budgets next year and into the foreseeable future, but increasing demand for services, one must consider that putting efforts to cut costs devoid of first getting a handle on the complete expense is like trying to clean any particular portion of a swimming pool: one will have short-range success but will not revolutionize the overall quality of the water.

(Kahler, 2000)Many economists and researchers consider that cost benefit analysis lacks in generating ethically appropriate information so should be avoided in an organization's performance evaluation. In modern time the supporters of cost benefit analysis are sanguine about the usefulness of the practice, but most of them also recognize severe flaws and the insufficiency of the standard methods for correcting these flaws. (Kahler, 2000)Dollar Range Of Costs To Reduce BudgetsWorst Case Analysis$ 90000 to $100000Best Case Analysis$55000 to $ 65000In the case of reducing cost of $ 94,000 without compromising on the operation or quality care of the organization, one has to study previous year costs and their impact on overall performance of Uptown Clinic.

As Uptown Clinic is a small organization depending on the services provided for the mental health patients so one can reduce the cost by reducing human resources for general operations within the organization. In Uptown Clinic, the assistant to administrator and one of two secretaries should be fired so Uptown Clinic can reduce cost of their salaries that is $ 56000. Further there is not much need of security for Uptown Clinic so cost of securities charges can be saved that is $ 12000. Uptown Clinic can easily reduce further cost of $ 14000 by smart purchasing and utilization of supplies.

Further Uptown Clinic should hire a social worker of less profile than the present one for outpatient mental health treatments in order to reduce cost of $12000. In this way the less experienced social worker will be able to perform under the supervision of the experienced social worker. One will also be able to seek guidance from the experienced social worker and in near future one will be developed as an experienced social worker. In this way a total sum of $ 94000 can be reduced without affecting the maneuver and quality care of the organization.

These reductions can be prioritized in the following manner:Salary of assistant$ 35000Salary of a secretary$ 21000Security$ 12000Supplies$14000Salary of social worker$12000Keeping an eye on the expenses of the past year I will advise Dr. Stephanie White to cut the costs in a steady process as if he reduces the cost by reducing the human resources of the organization then he has to give importance to the training of the left over employees of the Uptown Clinic who have to perform additional tasks.

(Rison, 2005) The standard operating procedures have to be transformed in simpler versions with decentralized approach. ReferencesRison P. Richard, Tower Jennifer; (2005), How to Reduce the Cost of HR and Continue to Provide Value Human Resource Planning, Vol. 28. Kahler Karen; (2000). Forget "Cost Cutting" Think Low-Cost Revenue Growth, ABA Banking Journal, Vol. 92.