I need help with 8.4 a through f please
l ancial Planning and Budget Costs: Variable: FFS $ 602,487 Capitated D 7 65,513 Total 000 $1,368,000 Contribution margin $ 574,000 Fixed costs 525,000 Actual profit $ 49,000 a. Construct Carroll's flexible budget for 2015. 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 variance analysis here and the Carroll Clinic illustration presented in the chapter. et contained in Exhib 8.4 Refer to Carroll Clinic's 2015 operating budget co 8.3. Instead of the actual results reported in Exhibit 8 results reported below: it 8.4, assume the T 10.12 Carroll Clinic: New 2015 Results Tolecane A FES 34,000 visits B. Capitated lives 30,000 members Number of a member-months 360,000 Actual utilization per member-month Number of visits 43,200 visits C. Total actual visits 77,200 visits in base II. Revenues: A. FFS $ 28 per visit * 34,000 actual visits $ 952,000 B. Capitated lives $2.75 PMPMorg x 360,000 actual member-months $ 990,000 C. Total actual revenues $1,942,000 III. Costs: A. Variable Costs: Labor $1,242,000 (46,000 hours at $27/hour) Supplies 126,000 (90,000 units at $1.40/unit) Total variable costs $1,368,000 Variable cost per visit $ 17.72 ($1,368,000 + 77,200) B. Fixed Costs: Overhead, plant, and $ 525,000 equipment C. Total actual costs $1,893,000 IV. Profit and Loss Statement: Revenues: FFS $ 952,000 to Capitated 990,000 Total $1,975,000 Chapter 8: Financial Planning and Budgeting 283 A FFS 36,000 visits 30,000 members 360,000 EXHIBIT 8.3 Carroll Clinic: 2015 Operating Budget Volume Assumptions: B. Capitated lives Number of member-months Expected utilization per member-month Number of visits C. Total expected visits Revenue Assumptions: A FFS 0.15 54,000 visits 90,000 visits X B. Capitated lives $ 25 per visit 36,000 expected visits $ 900.000 3 PMPM x 360.000 actual member-months $ 1,080,000 $ 1,980,000 c. Total expected revenues Ill. Cost Assumptions: A. Variable Costs: Labor Supplies Total variable costs Variable cost per visit 022 B. Fixed Costs: Overhead, plant, and equipment $ 1,200,000 (48,000 hours at $25/hour) 150,000 (100,000 units at $1.50/unit) $ 1,350,000 $ 15 ($1,350,000 + 90,000) $ 500,000 $ 1,850,000 C. Total expected costs IV. Pro Forma Profit and Loss (P&L) Statement: Revenues: FFS $ 900,000 Capitated 1,080,000 prove the Total $1,980,000 in Costs: dida or Variable: 000,08 FFS $ 540,000 Capitated 810,000 Total $ 1,350,000 Contribution margin $ 630,000 Otto Fixed costs 500,000 Projected profith an $ 130,000
