Business Assignment- Accounting Exper
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You have been asked by management to explain the variances in costs under your inpatient capitated contract. The following data is provided. Use the following data to calculate the variances. |
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Budget |
Actual |
|
|
Inpatient Costs |
$12,568,500 |
$16,618,350 |
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Members |
42,000 |
42,000 |
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Admission Rate |
0.070 |
0.095 |
|
Case Mix Index |
0.90 |
0.85 |
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Cost per Case (CMI = 1.0) |
$4,750 |
$4,900 |
Problem 1: What dollar amount of the total variance is attributed to Enrollment Variance?
Problem 2: What dollar effect did the increased admission rate have on cost?
Problem 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?
Problem 4: Costs per case increased to $4,900 from a budgeted value of $4,750. This increased actual total costs by what amount?
Problem 5: Using the information in the table below, calculate the amount of the unfavorable rate variance. Then select the letter from the list below that shows the correct answer.
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Budgeted |
Actual |
|
|
Volume |
200,000 |
190,000 |
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Revenue per unit |
$40 |
$37 |
|
Revenue |
$8,000,000 |
$7,030,000 |
- a) $400,000
- b) $570,000
- c) $970,000
- d) $600,000
- e) cannot calculate with given information
Problem 6: Using the information in the table below, determine how much of the supplies variance is due to a change in volume. Then select the letter from the list below that shows the correct answer.
Budgeted Actual Variance
Volume 1,000 1,100 100
Supplies $10,000 $12,750 $2,750
Fixed Labour $20,000 $22,250 $2,250
a) $ 900
b) $1,000
c) $1,050
d) $1,250
e) $1,500
USA 
India