8.4 Refer to Carroll Clinics 2011 operating budget contained in Exhibit 8.3. Instead of the actual results reported in Exhibit 8.4, assume reported below: A). Construct Carrolls Flexible budget for 2011. B). what are the profit variance, revenue variance, and cost variance? C). Consider the revenue variance. What is the component volume variance? The price variance? D). Break down the cost variance into volume and management components. E). Break down the management variance into labor, supplies, and fixed costs variances. F). Interpret your results. In particular, focus on the differences between the variances analysis here and the Carroll Clinic illustration presented in the Chapter. 8.4 Refer to Carroll Clinics 2011 operating budget contained in Exhibit 8.3. Instead of the actual results reported in Exhibit 8.4, assume reported below: A). Construct Carrolls Flexible budget for 2011. B). what are the profit variance, revenue variance, and cost variance? C). Consider the revenue variance. What is the component volume variance? The price variance? D). Break down the cost variance into volume and management components. E). Break down the management variance into labor, supplies, and fixed costs variances. F). Interpret your results. In particular, focus on the differences between the variances analysis here and the Carroll Clinic illustration presented in the Chapter. 8.4 Refer to Carroll Clinics 2011 operating budget contained in Exhibit 8.3. Instead of the actual results reported in Exhibit 8.4, assume reported below: A). Construct Carrolls Flexible budget for 2011. B). what are the profit variance, revenue variance, and cost variance? C). Consider the revenue variance. What is the component volume variance? The price variance? D). Break down the cost variance into volume and management components. E). Break down the management variance into labor, supplies, and fixed costs variances. F). Interpret your results. In particular, focus on the differences between the variances analysis here and the Carroll Clinic illustration presented in the Chapter. Carroll Clinic: Corrected 2011 Result 1. Volume: A. FFS 34,000 visits B. Capitated lives 31,000 members Number of member-months 372,000 Actual utilization per member-month 0.11613 Number of visits 43,200 visits C. Total actual visits 77,200 visits 2. Revenues A. FFS $28 per visit *34,000 actual visits which is 952,000 B. Capitated lives 2.75 PMPM *372,000 actual member-months which is 1,023,000 C. Total actual revenues 1, 975,000 3. Costs A. Variable costs Labor 1,242,000 (46,000 hours at $27/hr) Supplies 126,000 (90,000 units at $1.40/unit) Total variables 1,368,000 Variable cost per visit 17.72 (1,368,000/77,200) B. Fixed Costs: Overhead, plant, and equipment 525,000 C. Total actual costs 1,893,000 4. Profit and Loss Statement: Revenues: FFS 952,000 Capitated 1,023,000 Total 1,975,000 Costs: Variable FFS 602,487 Capitated 765,513 Total 1,368,000 Contribution margin 607,000 Fixed Costs 525,000 Actual Profit 82,000