Please answer Problem 8.4 ********** I have included Exhibit 8.3 and 8.4 that the problem refers to ***********

8.4 Refer to Carroll Clinic's 2015 operating budget contained in 8.3. Instead of the actual results reported in Exhibit 8.4, assume Variable results reported below: 602,487 FFS Capitated 765,513 Carroll Clinic: New 2015 Results $1,368,000 1. Volume: Contribution margin 574,000 34,000 visits 525,000 Fixed costs 30,000 members B. Capitated lives 49,000 Actual profit Number of member months a. Construct Carroll's flexible budget for 2015. Actual utilization per b. what are the profit variance, revenue variance, and cost variance 0.12 member-month 43,200 visits c. Consider the revenue variance. What is the component volume Number of visits variance? The price variance? C. Total actual visits 77200 visits d. Break down the cost variance into volume and management IL Revenues: visit 28 per components x 34,000 actual visits e. Break down the management variance into labor, supplies, and 952,000 fixed costs variances. $2.75 PMPM Interpret your results. In particular, focus on the differences B. Capitated lives x 360,000 actual member months between the variance analysis here and the Carroll Clinic S 990,000 illustration presented in the chapter C. Total actual revenues si Costs: Variable Costs: A. $1,242,000 (46,000 hours at $27/hour) Labor 126,000 (90,000 units at si 40/unit) Supplies Total variable costs $1,368,000 Variable cost per visit s 17.72 ($1,368,000 77,200) B. Fixed Costs overhead, plant, and s 525,000 equipment $1,893,000 C. Total actual costs IV Profit and Loss Statement: Revenues: 952,000 FFS 990,000 Capitated $1,975,000