Problem 8.6 is attached for reference. For part b, please indicate the 3 different variances (Dollar/Percentage Total Variance, Dollar/Percentage Volume Variance, and Dollar/Percentage Price Variance)
Problem 8.6 is attached for reference.
For part b, please indicate the 3 different variances (Dollar/Percentage Total Variance, Dollar/Percentage Volume Variance, and Dollar/Percentage Price Variance) for each of the 4 line items (Patient Revenues, Salary, Non-salary expense, and Profit).
8.7 Refer to Problem 8.6. Chelsea Clinic's actual results for 2015 are shown in the table below. 100,000 visits 40% 60% Total FFS Visit Volume Payer Mix: Blue Cross Highmark Reimbursement Rates: Blue Cross Highmark Variable Costs Resource Inputs: Labor Supplies $28 per visit visit $18 per 50,000 total hours 150,000 total units (continued) (continued from previous page) Resource Input Prices: Labor Supplies Fixed Costs (overhead, plant, and equipment) $28.00 per hour $1.50 per unit $500,000 a. Construct Chelsea Clinic's flexible budget and actual operating results for 2015. 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? 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. 8.6 Chelsea Clinic projected the following budget information for 2015: 90,000 visits 40% 60% $25 per visit $20 per visit Total FFS Visit Volume Payer Mix: Blue Cross Highmark Reimbursement Rates: Blue Cross Highmark Variable Costs Resource Inputs: Labor Supplies Resource Input Prices: Labor Supplies Fixed Costs (overhead, plant, and equipment) 48,000 total hours 100,000 total units $25.00 per hour $1.50 per unit $500,000 a. Construct Chelsea Clinic's operating budget for 2015. b. Discuss how each key budget assumption might result in a budget variance, and name the variance that would be used to examine results associated with each assumption. 8.7 Refer to Problem 8.6. Chelsea Clinic's actual results for 2015 are shown in the table below. 100,000 visits 40% 60% Total FFS Visit Volume Payer Mix: Blue Cross Highmark Reimbursement Rates: Blue Cross Highmark Variable Costs Resource Inputs: Labor Supplies $28 per visit visit $18 per 50,000 total hours 150,000 total units (continued) (continued from previous page) Resource Input Prices: Labor Supplies Fixed Costs (overhead, plant, and equipment) $28.00 per hour $1.50 per unit $500,000 a. Construct Chelsea Clinic's flexible budget and actual operating results for 2015. 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? 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. 8.6 Chelsea Clinic projected the following budget information for 2015: 90,000 visits 40% 60% $25 per visit $20 per visit Total FFS Visit Volume Payer Mix: Blue Cross Highmark Reimbursement Rates: Blue Cross Highmark Variable Costs Resource Inputs: Labor Supplies Resource Input Prices: Labor Supplies Fixed Costs (overhead, plant, and equipment) 48,000 total hours 100,000 total units $25.00 per hour $1.50 per unit $500,000 a. Construct Chelsea Clinic's operating budget for 2015. b. Discuss how each key budget assumption might result in a budget variance, and name the variance that would be used to examine results associated with each assumption
