Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Use the following budget assumptions that include both inpatient and outpatient revenue and expense. The assumptions are as follows, and you will use them to

Use the following budget assumptions that include both inpatient and outpatient revenue and expense. The assumptions are as follows, and you will use them to calculate and develop the As Budgeted, the Actual Budget, and the Static Budget Variance. Assess the impact of the variances in revenues and expenses.

Initial budget:

  • The budget anticipated 45,000 inpatient days this year at an average of $725 revenue per day.
  • Inpatient expenses were budgeted at $625 per patient day.
  • The budget anticipated 13,000 outpatient visits this year at an average of $425 revenue per visit.
  • Outpatient expenses were budgeted at $400 per visit.

Actual results:

  • Assume that only 92 percent of the inpatient days are going to actually be achieved for the year.
  • The average revenue of $675 per day will be achieved for these inpatient days.
  • The outpatient visits will actually amount to 113 percent for the year.
  • The average revenue of $405 per visit will be achieved for these visits.
  • Further assume that, due to the heroic efforts of the hospital employees working with the finance department, the actual inpatient expenses were decreased to 94% of budget and the actual outpatient expenses were decreased to 85% of budget.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Statements A Step By Step Guide To Understanding And Creating Financial Reports

Authors: Thomas Ittelson

1st Edition

1632652072, 978-1632652072

More Books

Students also viewed these Finance questions