Problem 1

Tallahassee Clinic projected the following budget information for 2018:

Total FFS Visit Volume	90,000 visits
Payer Mix:
Blue Cross	40%
Celtic Insurance Company	60%
Reimbursement Rates:
Blue Cross	$25 per visit
Celtic Insurance Company	$20 per visit
Variable Costs Resource Inputs:
Labor	48,000 total hours
Supplies	100,000 total units
Variable Costs Input Prices:
Labor	$25 per hour
Supplies	$1.50 per unit
Fixed Costs (overhead, plant, and equipment)	$500,000

Construct Tallahassee Clinics static operating budget for 2018. (See Exhibit 8.3, page 283. Note that there are four components that need to be included: Volume Assumptions, Revenue Assumptions, Cost Assumptions, and the Pro Forma Profit and Loss or P&L projected Statement.)

Problem 2

Refer to Problem 1 above. Tallahassee Clinics actual results for 2018 are shown in the table below:

Total FFS Visit Volume	100,000 visits
Payer Mix:
Blue Cross	40%
Celtic Insurance Company	60%
Reimbursement Rates:
Blue Cross	$28 per visit
Celtic Insurance Company	$18 per visit
Variable Costs Resource Inputs:
Labor	50,000 total hours
Supplies	150,000 total units
Variable Costs Input Prices:
Labor	$28 per hour
Supplies	$1.50 per unit
Fixed Costs (overhead, plant, and equipment)	$500,000

a. Construct Tallahassee Clinics flexible budget for 2018 and actual operating results for 2018. (Hint: place the three budgets side by side. See Exhibits 8.4 and 8.5).

b. What is the profit variance?

c. Wat is the revenue variance?

d. What is the cost variance?

e. Focus on the revenue side. What is the volume variance?

f. Focus on the revenue side. What is the price variance?

g. Focus on the cost side. What is the volume variance?

h. Focus on the cost side. What is the management variance?

I ONLY NEED THE ANSWERS TO PROBLEM 2 BUT IT REFERENCED PROBLEM 1

3393000 what the volume level is On ner, the $100 009 m Resats S Capitated visits rrs Spo.000 $1,00,000 $960,000 5 s4800 6o0000 640,000 Conelbutlion margin $630,000 400,000 5 24,000 5 130.000( too.oo)253.000) Conducting the Variance Analysis As esplainnd carler, varianoe analysis lnvolves comparing two amounts, with the variance being the difference betwoon the values For example, if at the beginning of the year, a honpital expected to make a profie of S2 million but aual resuils were a profie of $3 milion, the variance would be $1 million tendard valoe, in this case 52 million of profits, ja the proe