1. It is January 2, 2012 and you have started your first day of work as the Practice Administrator for the Tri-Cities Geriatric Center (a physician practice serving older adults). Your first job is to project a budget for calendar year 2012. In gathering information for this task, you come across budgets for the past 3 years. However, the former Director did not complete budget worksheets (maybe the reason he was fired), so you dont have complete information.
2. Complete the CY 2009, 2010, and 2011 budgets (Table 1a). 2 points

	Table 1a
	Tri-Cities Geriatric Center
	Historical Financial Data
	CY 2009	CY2010	CY2011		2012	Assumptions
Number of visits	12,000	12,120	12,241
Private insurance visits			9,793
TennCare visits	2,400	2,424
Net Revenue		$557,520	$563,090
Private revenue	$480,000	$484,800
TennCare revenue	$72,000		$73,440
Expenses
Salaries and wages	$134,933	$136,283	$137,644
Physician fees	$179,512	$181,307	$183,119
Malpractice insurance	$32,013	$32,333	$32,656
Travel and education	$4,488	$4,533	$4,578
General insurance	$8,377	$8,461	$8,546
Utilities	$12,267	$12,389	$12,513
Equipment and lease	$1,496	$1,511	$1,526
Other operating expenses	$89,756	$90,654	$91,559
Total Operating Expenses	$462,842	$467,471	$472,141
Net profit (loss)

1. Construct a P&L statement for CY 2012, with assumptions for why you projected EACH number. 3 points
2. Assume that it is now January 2, 2013 and the actual budget numbers were reported for CY 2012 in Table 1b. Complete a budget variance report (both dollar variance and percent variance) for CY 2012. What does this variance report tell us about revenues and expenses (profit/loss)? What could you have done to increase profit or prevent loss? 10 points

	Table 1b
	Tri-Cities Geriatric Center
	Budget Variance Report
	Budget CY 2012	Actual CY 2012	Variance CY 2012	% Variance CY 2012
Number of visits		14,100
Private insurance visits		11,300
TennCare visits		2,800
Net Revenue		$598,100
Private revenue		$508,500
TennCare revenue		$89,600
Expenses
Salaries and wages		$147,835
Physician fees		$201,334
Malpractice insurance		$34,686
Travel and education		$3,700
General insurance		$8,824
Utilities		$12,267
Equipment and lease		$1,672
Other operating expenses		$107,385
Total Operating Expenses		$517,703
Net profit (loss)		$80,397

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