Question
Use the information from the previous problem. Instead of using the step-down method of cost allocation, a company decided to use the direct method. What
- Use the information from the previous problem. Instead of using the step-down method of cost allocation, a company decided to use the direct method. What is your allocation rate for human resources?
$________ per employee
Possible answers: 40, 66.67
- Baptist Hospital has visits from a charge-based FFS payer. Baptist has the information below that can help you identify how profitable it is on FFS basis. The payer now wants to move all 50 of its enrollees to a capitation system. What per member per month (PMPM) rate must be set on these patients to maintain the current profit level? $_________ (round to two decimal places)
FFS revenues per visit = $20 |
Variable cost per visit = $5 |
Fixed cost (annual) = $300 |
FFS Visits (annual) = 100 |
- A hospital accepts both fee for service (FFS) and capitation payers and breaks out its revenues into FFS revenue and capitated revenue. The hospital created a static budget prior to the year and now the actual results are available so it is completing a flexible budget. If the actual number of visits for its capitated patients was higher than the budgeted number of visits (from the static budget), the total revenues for the capitated group on the flexible budget would be ________?
- Higher than on the static budget
- The same as on the static budget
- Lower than on the static budget
- A hospital accepts both fee for service (FFS) and capitation payers. The hospital created a static budget prior to the year and now the actual results are available so it is completing a flexible budget. If the actual number of visits for its capitated patients was higher than the budgeted number of visits (from the static budget), the total costs for the capitated group on the flexible budget would be ________?
- Higher than on the static budget
- The same as on the static budget
- Lower than on the static budget
- Use the information below to answer the next two questions.
Budgeted: | |||
# of FFS Visits = 200 | |||
# of Capitated Visits = 50 | |||
Revenue per visit = $50 | |||
PMPM Revenue = $10 | |||
Member months = 100 | |||
Variable Cost per Visit = $20 | |||
Fixed costs = $2,000 | |||
Actual: | |||
# of FFS Visits = 300 | |||
# of Capitated Visits = 100 | |||
Revenue per visit = $60 | |||
PMPM Revenue = $10 | |||
Member months = 200 | |||
Variable cost per visit = $25 | |||
Fixed costs = $3,000 | |||
Static (Budgeted) | Flexible | Actual | |
Revenues: | |||
FFS | 10,000 | 18,000 | |
Capitated | 1,000 | 2,000 | |
Total Revenues | 11,000 | 20,000 | |
Costs: | |||
Variable: | |||
FFS | 4,000 | 7,500 | |
Capitated | 1,000 | 2,500 | |
Total Variable Costs | 5,000 | 10,000 | |
Fixed Costs | 2,000 | 3,000 | |
Total Costs | 7,000 | 13,000 | |
Profit | 4,000 | 7,000 |
Calculate the volume variance for revenue. If the variance is negative put a in front of the number (i.e. -200) $_______________
- Using the information from the previous problem, calculate the price variance for revenue. If the variance is negative put a in front of the number (i.e. -200). $____________
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started