assign7

Week 7 Assignment — Budgeting and Variance Analysis

Instructions:

The following are budgeted and actual revenues and expenses for a hospital.

Budgeted Actual

Revenues

Surgical Volume 2,300 2,700

Gift Shop Revenues $19,000 $22,000

Surgery Revenues $600,500 $569,325

Parking Revenues $14,600 $9,600

Expenses

Patients Days 27,000 26,650

Pharmacy $120,000 $160,000

Misc Supplies $66,000 $59,000

Fixed Overhead Costs $808,000 $880,000

Using the “Week 7 Assignment Budget and Variance Analysis Excel Template” 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 a side-by-side budget, flexible budget estimate, and the actual Surgical Revenues.

6. Prepare a flexible budget estimate. Present a side-by-side budget, flexible budget estimate, and the actual Patient Expenses.

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