Instead of the results in Problem 8.4, consider the results reported below: Carroll Clinic: New 2015 Results I. 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 II. Revenues: A. FFS $ 28 per visit 34,000 actual visits $ 952,000 B. Capitated lives $ 2.75 PMPM 372,000 actual member-months $1,023,000 C. Total actual revenues $1,975,000 (continued) 00_GapenskiReiter (2299).indb 299 11/11/15 11:00 AM Copying and distribution of this PDF is prohibited without written permission. For permission, please contact Copyright Clearance Center at www.copyright.com 300 Healthcare Finance 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 equipment $ 525,000 C. Total actual costs $1,893,000 IV. 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 Refer to Problem 8.4. Assume the results reported in that problem hold, except that a difference existed among budgeted (static) enrollment and realized enrollment. The corrected results are presented above. a. Construct Carrolls flexible budgets for 2015. (Hint: Because of a change in enrollment, creating three flexible budgets is necessary. See the note to Exhibit 8.7.) b. What are the profit variance, revenue variance, and cost variance? c. Focus on the revenue side. What is the volume variance? The price variance? Break the volume variance into enrollment and utilization components. How does your answer here differ from your corresponding answer to Problem 8.4? d. Now consider the cost side. What are the volume and management variances? Break down the management variance into labor, supplies, and fixed costs variances. e. Interpret your results. In particular, focus on the differences between the variance analysis here and the one in Problem 8.4.