Use the following data to calculate the variances in problems 7-10.

You have been asked by management to explain the variances in costs under your inpatient capitated contract. The following data is provided.

BudgetActual

Inpatient Costs$12,568,500$16,618,350

Members42,00042,000

Admission Rate0.0700.095

Case Mix Index0.900.85

Cost per Case (CMI = 1.0)$4,750$4,900

1.What dollar amount of the total variance is attributed to Enrollment Variance?

2.What dollar effect did the increased admission rate have on cost?

3.The intensity of care delivered dropped from a budgeted case mix of 0.90 to an actual case mix of 0.85. What dollar effect did this have on actual costs?

4.Costs per case increased to $4,900 from a budgeted value of $4,750. This increased actual total costs by what amount?