Write a Memo to Bridgestone Director
ISSN 1940-204X
Bridgestone Behavioral Health Center: Cost-Volume-Profit (CVP) Analysis for Planning and Control
A. Ronald Kucic University of Denver IntroductIon
Thomas: In reality, securing some outside assistance seems
James E. Sorensen University of Denver
Lisa M. Victoravich University of Denver
In June of the current year Dr. Thomas Russell, Executive Director, and Susan Smyth, Accountant, at the Bridgestone Behavioral Health Center were discussing the necessity of gaining a better understanding of how to monitor the Center’s operating and financial performance. Located in Cleveland, Ohio, Bridgestone provides prevention, intervention, and treatment services for individuals with substance abuse problems. Bridgestone’s management is concerned about its financial performance after realizing a loss in the prior year although a small profit was projected. Despite management’s concern and attention of Bridgestone’s profitability troubles, the Center’s annual budget once again contains a projection for a meager profit of $7,000 (see Exhibit 1).
Thomas: According to the financial reports that you have
to be a good option to avoid future losses. Since my training is in psychology, I don’t have the accounting background to take the task on myself. We need someone who specializes in financial management for nonprofit human service organizations.
BrIdGEStonE BAcKGround
HIStory And MISSIon Bridgestone is a comprehensive outpatient substance abuse treatment center located in the Midwest United States. Since 1985, Bridgestone has offered a continuum of outpatient services, including counseling, crisis intervention, detoxification, and methadone maintenance. The Bridgestone mission is to be a leader in healing and changing lives by providing high quality behavioral health care and rehabilitation to all individuals in need. With this mission, the Center promises to advance behavioral healthcare through the creation of innovative services and enriching
Bridgestone Behavioral Health Center: Cost-Volume-Profit (CVP) Analysis for Planning and Control
A. Ronald Kucic University of Denver IntroductIon
Thomas: In reality, securing some outside assistance seems
James E. Sorensen University of Denver
Lisa M. Victoravich University of Denver
In June of the current year Dr. Thomas Russell, Executive Director, and Susan Smyth, Accountant, at the Bridgestone Behavioral Health Center were discussing the necessity of gaining a better understanding of how to monitor the Center’s operating and financial performance. Located in Cleveland, Ohio, Bridgestone provides prevention, intervention, and treatment services for individuals with substance abuse problems. Bridgestone’s management is concerned about its financial performance after realizing a loss in the prior year although a small profit was projected. Despite management’s concern and attention of Bridgestone’s profitability troubles, the Center’s annual budget once again contains a projection for a meager profit of $7,000 (see Exhibit 1).
Thomas: According to the financial reports that you have
to be a good option to avoid future losses. Since my training is in psychology, I don’t have the accounting background to take the task on myself. We need someone who specializes in financial management for nonprofit human service organizations.
BrIdGEStonE BAcKGround
HIStory And MISSIon Bridgestone is a comprehensive outpatient substance abuse treatment center located in the Midwest United States. Since 1985, Bridgestone has offered a continuum of outpatient services, including counseling, crisis intervention, detoxification, and methadone maintenance. The Bridgestone mission is to be a leader in healing and changing lives by providing high quality behavioral health care and rehabilitation to all individuals in need. With this mission, the Center promises to advance behavioral healthcare through the creation of innovative services and enriching