Managerial Accounting Report: Healthcare Centre Financial Analysis

This report provides a comprehensive analysis of managerial accounting principles as applied to a healthcare center. It begins with an introduction to the business goal of such a center, emphasizing its increasing importance in today's market. The report then details the process of establishing a health care center, outlining the necessary equipment, labor, and operational requirements. A significant portion of the report focuses on standard costing, including detailed estimates for material and equipment costs, direct labor costs, and overhead costs. Revenue projections are presented, along with estimates for operating expenses. The core of the report includes a master budget, summarizing estimated revenues, expenses, and net income. The report concludes with reflections on the challenges faced during the assignment, particularly data availability, and a conclusion summarizing the key findings and assumptions made. References to relevant academic literature are also included.

Running head: MANAGERIAL ACCOUNTING
Management Accounting
Name of student:
Name of the University:
Authors’ note

1MANAGERIAL ACCOUNTING
Table of Contents
Introduction:...............................................................................................................................3
The Goal of business:.................................................................................................................3
Establishing a health care centre:...............................................................................................4
Standard Cost:............................................................................................................................4
Estimates material and equipment cost:.................................................................................4
Estimates of Direct labour costs:............................................................................................5
Estimates of overhead cost:....................................................................................................6
Estimates of revenues:............................................................................................................7
Estimates Operating expenses:...............................................................................................7
Master Budget:.......................................................................................................................8
Reflections:................................................................................................................................9
Conclusion:..............................................................................................................................10
References:...............................................................................................................................11

2MANAGERIAL ACCOUNTING
Introduction:
A health club, which is commonly known as the fitness centre or the fitness club is
generally considered as the place or a house of exercise used for the purpose of physical as
well as mental (meditation) exercise. In today’s market it is considered as one of the leading
service because present professional workloads make several negative impacts on the
physical as well as the mental conditions of individual person mainly effecting to women.
Most of the fitness clubs use dumbbells, barbells and some other machines of exercise as
their equipment. A fitness centre do mainly engage in providing services to public, the main
and most of expenses are incurred due to the payment of remuneration to the trainers and also
the employees who are engaged in providing related service in case of functioning the health
club properly and smoothly (Guajardo, 2017). The main sources of revenues are the service
charges they receive for providing such health care and fitness services.
The Goal of business:
In Australia for the purpose of physical and mental fitness, many health and care
services are opened mainly for the women. Those health care centres provide gym facilities,
along with yoga, zumba and Pilates services. In present situation, most of people mainly
women are joining those fitness and health care services to maintain their health conditions in
order to stable their mental positions. According to the market surveys the present year 2018-
19, the number of fitness centre is 3468, which was 3435 in the year 2017-18. In comparison
to the past decades the number of health care establishments are continuously increasing. Due
to the reason of present demand and continuous increasing trend purpose, a health and fitness
care are considered as useful and beneficial (Zeanah, 2018).

3MANAGERIAL ACCOUNTING
Figure 1: No of fitness centre from 2004-05 to 2018-19
Establishing a health care centre:
For the purpose of maintaining the physical and mental condition to be as stable and
fit, many fitness and health care service centres are opened. For such opening there is a
requirement of a proper place where the centre will be opened. Next to the process the
requirements are equipments and machineries, which are generally used for serving of such
main purpose. To maintain and function this service centre smoothly there is the requirement
for several numbers of employees and trainers who will help to conduct the service centre’s
functions properly (Mauskopf & Earnshaw, 2018).
Standard Cost:
Estimates material and equipment cost:
In case of opening of a health and service centre it generally requires several
equipments and other accessories so that such centre can perform it functions smoothly. The
present price of each and individual equipment’s are estimated in case of computation of the
material and equipment values. The equipment and the other required components usually are

4MANAGERIAL ACCOUNTING
used in the fitness centre which are considered in case for estimating the opening cost of the
health care centre.
Figure 2: Material and Equipment cost.
Estimates of Direct labour costs:
In case of opening of a health and care centre, the general labour charges are needed
to pay to people who perform to conduct such centre in case of functioning smoothly. Those
people are the tranners, cooks, guards and also the cleaners. According to the market surveys
it estimates that the charges needed to pay to such service provider as follows:

5MANAGERIAL ACCOUNTING
Figure 3: Labour cost.
Estimates of overhead cost:
In case of computation of the overhead cost of such health and care centre it is
segregated into two different parts: One is the variable overhead and the other one is fixed
overhead. In case of such estimates the genreall expences probable to occur for the smooth
function are considered.
Figure 4: Overhead cost

6MANAGERIAL ACCOUNTING
Estimates of revenues:
For a health and care unit generally the revenues are derived from the service charges
they charge from the service receivers in case of providing such services. In an health and
fitness care unit generally the revenues derived from the gym centre or from the yoga centre
or maybe from such oher health fitness services are provided by such health care unit. Here ,
it is assumed that the health and care centre provides Zumba and pilates along with gym and
yoga facilities. Here, there is the presentation of the estimates of 1month revenues that
probably is generate from such centre:
Figure 5: Estimates of 1month revenues.
Estimates Operating expenses:
A health and care unit generally incur some expenses in case of providing such
services.The tranners fees and others employees remunerations to internet and other expenses
generally incurred for the smooth functioning of such service centre. Here, the estimates of
1month expenses in starting of the health and care centre is presented:

7MANAGERIAL ACCOUNTING
Figure 5: Estimates of 1month expenses.
Master Budget:
The master budget is the estmate of 1month revenues and expenses amount that
probably occur to compute the amount of net income. In an health and fitness care unit,
generally the revenues are derived from the gym centre or from the yoga centre or maybe
from such oher health fitness services provided by such health care unit. Here, it is assumed
that the health and care centre provide Zumba and pilates along with gym and yoga
facilities.The expenses incurred in case of providing such services are: the tranners fees and
others employees remunerations to internet and other expenses generally incurred for the
smooth functioning of such service centre.

8MANAGERIAL ACCOUNTING
Figure 5: Estimates of 1month Master budget
Reflections:
In case of computation of this assignment the general problem that was faced are the
availability of data. How a health and fitness care centres cost data will get derived was the
real difficulties. Although for the purpose of this assignment data are used as per the present
market price and geneally incase of opening a service centre usual requiremented components
are used. For the purpose of 1month master budget the revenues possible to derive from such
centres are used and the same thing is applied in case of expenses. The general amount of
each equipment’s price are as per the market value.

9MANAGERIAL ACCOUNTING
Conclusion:
It is concluded from the above report that health and fitness care centre in the present
condition is considered to be as one of the leading service provider section for business
purposes. Here, the report assumes the present market value of individual equipment that is
usually used in case of opening a health care centre. This report is representing the direct
material, labor and the overhead cost, which is generally incurred for such service providing a
purpose. The end part of this report represents the estimated 1month master budget along
with the estimated cost of expenses and revenues.

10MANAGERIAL ACCOUNTING
References:
Barr, M. J., & McClellan, G. S. (2018). Budgets and financial management in higher
education. John Wiley & Sons..
Hauriasi, A., Van-Peursem, K., & Davey, H. (2016). Budget processes in the Anglican
Church of Melanesia: an emergent ethnic identity. Accounting, Auditing &
Accountability Journal, 29(8), 1294-1319.
Jaafar, S., Bakar, N. S., & Norsuriana, A. (2015, May). A Descriptive Study on Awareness
and Knowledge of Small Business Budget in Selangor. In International Conference
on Economics and Banking (iceb-15). Atlantis Press.
Mashika, R. (2016). Preparation of budget, sensitivity analysis, budgeting toolkit, and
determination of capital for commissioning entity.
Mauskopf, J., Earnshaw, S. R., Brogan, A., Wolowacz, S., & Brodtkorb, T. H.
(2017). Budget-Impact Analysis of Health Care Interventions. New York, NY:
Springer Berlin Heidelberg.
Neumann, P. J., Sanders, G. D., Russell, L. B., Siegel, J. E., & Ganiats, T. G. (Eds.).
(2016). Cost-effectiveness in health and medicine. Oxford University Press.
Sheth, K. N., & Sheth, K. N. (2017). Process of Construction of Budget. International
Journal, 4, 60-61.
Wan, Keshu. "Cost Budget and Cost Control Analysis of New Green Building Projects."
(2018).