ACG Unit 2 IP - 1 RUNNING HEAD: UNIT 2 INDIVIDUAL PROJECT...

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1 RUNNING HEAD: UNIT 2 INDIVIDUAL PROJECT Unit 2 Individual Project By Lorraine Huff AIU Online April 18, 2010
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2 Costs can best be described as the price one pays for a service or product. There are two different types of costs, committed and discretionary. Committed costs are costs that must be paid regardless of any situation. For example, taxes and building occupancy expenses such as rent or mortgages are committed costs. Discretionary costs are those that are not a necessity for the operation. Dr. Stephanie White, the Chief Administrator of Uptown Clinic, a community mental health agency, is concerned about the dilemma of coping with reduced budgets next year and into the foreseeable future, but increasing demand for services. In order to plan for reduced budgets, she must first identify where costs can be cut or reduced and still keep the agency functioning. When reducing costs, she must first determine which of the costs are committed and which are discretionary. Program Area Costs Disc/Comm Why? Administration Salaries: Administrator $60,000 Committed Administration is necessary for the operations of the program; however the salary could be adjusted to help lower costs. Assistant $35,000 Discretionary Administrative Assistants are not necessary. An assistant
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ACG Unit 2 IP - 1 RUNNING HEAD: UNIT 2 INDIVIDUAL PROJECT...

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