ACC - You have been asked by management to explain the variances in costs
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You have been asked by management to explain the variances in costs under your n patient capitated contract. The following data is provided. Use the following data to calculate the variances. | ||
Budget | Actual | |
Inpatient Costs | $12,568,500 | $16,618,350 |
Members | 42,000 | 42,000 |
Admission Rate | 0.070 | 0.095 |
Case Mix Index | 0.90 | 0.85 |
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.
Budgeted | Actual | |
Volume | 200,000 | 190,000 |
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.
BudgetedActualVariance
Volume1,0001,100100
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
12 years ago
