Help,I'm really stuck and panicking about a budget question I don't understand. Be so grateful for some help

Question

Hi, are there any budget experts out there who may be able to help me out with the following?
I am in an absolutely desperate situation where I have been given the following question to answer and am at a loss at how to even begin to answer it..

'You have prepared a budget for the Medical Council's expenses for the year ending 31 Dec 08 as follows:

Venue costs £34,000
Employee costs £100,000
Doctors' expenses £20,000

You submit this budget to the Council, and the budget is agreed, with the exception of doctors' expenses, which are to be increased by 12.5%.

This budget is to be charged to the following PCT' in proportion to the number of doctors in each PCT area as follows:

Richmond - 78 doctors
Brixton - 102 doctors.

Produce a budget for submission to the Brixton PCT.

If anyone could help me out I would be eternally grateful. It seems extremely complicated and I'm not sure how to start. I'm sure I'm just being thick.

If you are able to help, thank you in advance.

Answer 1

1. First figure out new doctors expenses total--
20,000 x 1.125 = 22,500

2. Figure out what proportion of expenses should go to Brixton--

78+102 = 180 Total Doctors, 102/180 = 56.66%

3. Multiply the expenses by 56.66% to get Brixton's budget--

Venue costs 19,266.67
Employee costs 56,666.67
Doctors expenses 12,750.00

Answer 2

Increase the doctors' expenses by 12.5%:

£20,000 x 1.125 = £22,500

Total number of doctors = 180

Cost for Brixton = 102 / 180 = 0.57 of overall budget

Venue cost = £34,000 x 0.57
Employee costs = £100,000 x 0.57
Expenses = £22,500 x 0.57

I'm sure you can do the bit of arithmetic above!

Answer 3

../ and so in one question we now understand why the NHS is in the total mess it is today .,.

ONLY a fantasy Government run institution like the NHS would have a Budget process that actually INCREASED expenses (to an amazing 22.5% of Salaries !) -- in the "Real World" expenses are only every REDUCED during the Budget process ..

Answer 4

£34,000 + £100,000 + (£20,000 * 1.125) = £156,500/ (78+ 102) = £869.44* 102 = £88,683.33