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Company: PQR Healthcare Solutions Managerial Accounting Process: Cost Variance Analysis Cost Category Budgeted Amount ($ million) Actual Amount ($ million) Medical Supplies 25 30 Salaries

Company: PQR Healthcare Solutions

Managerial Accounting Process: Cost Variance Analysis

Cost Category

Budgeted Amount ($ million)

Actual Amount ($ million)

Medical Supplies

25

30

Salaries

50

45

Administrative

10

12

Facility Maintenance

15

18

Requirements:

  1. Variance Analysis:
    • Calculate the total variance and the price and efficiency variances for each cost category at PQR Healthcare Solutions.
  1. Flexible Budgeting:
    • Prepare a flexible budget for PQR Healthcare Solutions based on the actual activity level, assuming a 10% increase in patient visits from the budgeted level.
  1. Performance Evaluation:
    • Evaluate the performance of each department at PQR Healthcare Solutions based on the variances identified in the cost variance analysis.
  1. Cost Control Measures:
    • Recommend two cost control measures that PQR Healthcare Solutions could implement to reduce the overall cost variances identified.
  1. Strategic Cost Management:
Discuss how PQR Healthcare Solutions can use variance analysis to improve its cost management strategies and operational efficiency

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