Law Week 9 Assignment- Healthcare Finance
Cynthia60
a month ago
20
files (5)Week9AssignmentLearningResources-HealthcareFinance.docx
Week9Assignmentversion2.pdf
Week9AssignmentInstructions-HealthcareFinance.docx
USW1_MMHA_6400_Week09_budgetAndVarianceTemplate.xlsx
- Chapter09UHFM8thEdPPT-1.pptx
Week9AssignmentLearningResources-HealthcareFinance.docx
Week 9 Assignment Learning Resources
Healthcare Finance
Required Reading
· Pink, G. H., & Song, P. H. (2020). Gapinski’s understanding healthcare financial management (8th ed.). Health Administration Press.
· Chapter 5, “Financial Risk and Required Return” (pp. 147–189)
· Review: Chapter 11, “Capital Budgeting” (pp. 407–457)
· Chapter 14, “Financial Forecasting” (pp. 549–587)
Note: For this Assignment, review Chapter 11, which was assigned previously in this week’s Discussion.
· Document: Week 9 Assignment Budget and Variance Excel Template (Excel spreadsheet)
Required Media
· Walden University, LLC. (2024). Preparing a performance report (flexible budget) [Video]. Walden University Canvas. https://waldenu.instructure.com
·
Week9Assignmentversion2.pdf
Healthcare Financial Management and Economics
Week 9 Assignment – Budgeting
Instructions:
The following are budgeted and actual revenues and expenses for a hospital.
______________________________________________________________________________
Budgeted Actual
Revenues
Surgical Volume 2,500 2800
Gift Shop Revenues $19,500 $22,200
Surgery Revenues $590,500 $850,000
Parking Revenues $18,500 $21,800
Expenses
Patients Days 28,000 26,000
Pharmacy $123,000 $155,000
Misc Supplies $695,000 $790,000
Fixed Overhead Costs $840,000 $875,000
Using an Excel spreadsheet to show your calculations:
1. Determine the total variance between the planned and actual budgets for Surgical Volume. Is the variance favorable or unfavorable?
2. Determine the total variance between the planned and actual budgets for Patient Days. Is the variance favorable or unfavorable?
3. Determine the service-related variance for Surgical Volume. 4. Determine the service-related variance for Patient Days. 5. Prepare a flexible budget estimate. Present side-by-side budget, flexible budget estimate,
and the actual Surgical Revenues. 6. Prepare a flexible budget estimate. Present side-by-side budget, flexible budget estimate,
and the actual Patient Expenses. 7. Determine what variances are due to change in volume and what variances are due to
change in rates.
Week9AssignmentInstructions-HealthcareFinance.docx
Week 9 Assignment
Healthcare Finance
Budgeting and Variance Analysis
Budgeting is an important activity within every healthcare organization. The particular challenges encountered, however, can vary depending on the type of organization. A state or federally funded organization, for example, will likely have a budget that is allocated to it, and it needs to follow specific guidelines on how the money can be used. A for-profit organization, by contrast, will typically have more influence and flexibility in setting up its budget and making choices on matters such as how much to spend on marketing, patient care, or incentives for employees.
In addition to preparing budgets, as a healthcare administrator, you must also be able to evaluate whether or not you have achieved your budget using variance analysis. This is important because variance analysis measures the differences between the budget and actual results and provides administrators with a starting point for correcting financial performance. For this Assignment, you conduct a variance analysis for a healthcare organization.
To prepare for this Assignment:
· Review the Week 9 Assignment document provided to you by the Instructor. Examine the budgeted and actual revenues and expenses for a hospital. Reflect on concepts of budgeting and variance.
· Review Chapter 5, Chapter 11, and Chapter 14 of Gapinski’s Understanding Healthcare Financial Management.
Submit your “Week 9 Assignment Budget and Variance Excel Template,” to address the following:
· Determine the total variance between the planned and actual budgets for Surgical Volume. Is the variance favorable or unfavorable?
· Determine the total variance between the planned and actual budgets for Patient Days. Is the variance favorable or unfavorable?
· Determine the service-related variance for Surgical Volume.
· Determine the service-related variance for Patient Days.
· Prepare a flexible budget estimate. Present a side-by-side budget, flexible budget estimate, and the actual Surgical Revenues.
· Prepare a flexible budget estimate. Present a side-by-side budget, flexible budget estimate, and the actual Patient Expenses.
· Determine what variances are due to change in volume and what variances are due to change in rates.
USW1_MMHA_6400_Week09_budgetAndVarianceTemplate.xlsx
Week 9 Assignment Template
| Revenues | Expenses | ||||||||||||||||
| Givens: | Budgeted | Actual | Givens: | Budgeted | Actual | ||||||||||||
| [A] | Surgical volume | [A] | Patient days | ||||||||||||||
| [B] | Gift shop revenues | [B] | Pharmacy | ||||||||||||||
| [C] | Surgery revenues | [C] | Miscellaneous supplies | ||||||||||||||
| [D] | Parking revenues | [D] | Fixed overhead costs | ||||||||||||||
| 1. Determine the total variance between the planned and actual budgets for Surgical Volume. Is the variance favorable or unfavorable? | 2. Determine the total variance between the planned and actual budgets for Patient Days. Is the variance favorable or unfavorable? | ||||||||||||||||
| Budgeted | Actual | Variance | Variance | ||||||||||||||
| [E] | Surgical volume [A] | [E] | Patient days [A] | ||||||||||||||
| [F] | Gift shop revenues [B] | [F] | Pharmacy [B] | ||||||||||||||
| [G] | Surgery revenues [C] | [G] | Miscellaneous supplies [C] | ||||||||||||||
| [H] | Parking revenues [D] | [H] | Fixed overhead costs [D] | ||||||||||||||
| [I] | Total variance [E] | [I] | Total variance | ||||||||||||||
| 3. Determine the service related variance for Surgical Volume. | 4. Determine the service related variance for Patient Days. | ||||||||||||||||
| Variance | Variance | ||||||||||||||||
| [J] | Total variance [I] | [J] | Total variance [I] | ||||||||||||||
| [K] | Gift shop revenue variance [F] | [K] | Amt. explained by fixed overhead [H] | ||||||||||||||
| [L] | Parking revenue variance [H] | [L] | Other fixed expenses | ||||||||||||||
| [M] | Service-related variance [J-K-L] | [M] | Service-related variance [J-K-L] | ||||||||||||||
| 5. Prepare a flexible budget estimate. Present side-by-side budget, flexible budget estimate, and the actual surgical revenues. | 6. Prepare a flexible budget estimate. Present side-by-side budget, flexible budget estimate, and the actual patient expenses. | ||||||||||||||||
| Budgeted | Flexible | Actual | Budgeted | Flexible | Actual | ||||||||||||
| [N] | Surgical volume [A] | [N] | Patient days [A] | ||||||||||||||
| [O] | Surgical revenue per unit [C / A] | [O] | Cost per patient day (Pharm + Misc) [B+C]/[A] | ||||||||||||||
| [P] | Surgical revenue [C] | [P] | Total cost (Pharm+Misc) [N x O] | ||||||||||||||
| 7. Determine what variances are due to change in volume and what variances are due to change in rates. | |||||||||||||||||
| Budgeted | Flexible | Actual | Variance | ||||||||||||||
| [Q] | Budgeted surgical revenue [P] | ||||||||||||||||
| [R] | Flexible surgical revenue [P] | ||||||||||||||||
| [S] | Actual surgical revenue [P] | ||||||||||||||||
| [T] | Volume variance [R - Q] | ||||||||||||||||
| [U] | Rate variance [S - R] |
