19.docx - 11-19 Detailed variance analysis Dermatology HMO Contract Given A B C D a Budgeted Patient visitsa 25,000 Revenues $360,000 Monthly expenses

19.docx - 11-19 Detailed variance analysis Dermatology HMO...

This preview shows page 1 out of 1 page.

11-19 Detailed variance analysis: Dermatology HMO Contract Given: Budgeted Actual A Patient visits a 25,000 35,000 B Revenues $360,000 $550,000 C Monthly expenses $300,000 $370,000 D Fixed overhead costs $0 $0 a Budgeted: 100,000 Enrollees x 1/4 of Enrollees use services = 25,000 Visits:100,000 x 0.25 = 25,000 Actual: (100,000 Enrollees + 0.05 x (100,000 Enrollees)) x 1/3 of Enrollees use services = 35,000 Visits: 35,000 a. Revenue variance report Budgeted PMPM [Given B] Budgeted / [Given A] Budgeted = $14.40 Revenue variance [Given B] Actual - [Given B] Budgeted = $190,000 Favorable Flexible Budgeted Budget Actua l E Volume [A] 25,000 35,000 35,000 F Rate [B / A] $14.40 $14.40 $15.71 G Revenues [E x F] $360,000 $503,995 $550, 000 Volume Variance (Actual Volume - Budgeted Volume) x Budgeted Rate $143,995 Favorable Rate Variance (Actual Rate - Budgeted Rate) x Actual Volume $46,005 Favorable $190,000 Favorable Expense variance report
Image of page 1

You've reached the end of your free preview.

Want to read the whole page?

Unformatted text preview: Budgeted PMPM [Given C] Budgeted / [Given A] Budgeted $12.00 Cost variance [Given C] Actual- [Given C] Budgeted Flexible $70,0 00 Unfavor able Budgeted Budget Actual H Volume [A] 25,000 35,000 35,000 I Rate [C / A] $12.00 $12.00 $10.57 J Expenses [H x I] $300,000 $419,996 $370, 000 Volume Variance (Actual Volume - Budgeted Volume) x Budgeted Cost/Unit $119,996 Unfavorable Cost Variance (Actual Cost/Unit - Budgeted Cost/Unit) x Actual Volume ($49,996) Favorable $70,000 Unfavorable b. Both revenue variances are favorable, because both are higher than budgeted. Expense volume variance is unfavorable, because it is more than budgeted (costs are higher). Expense cost variance is favorable, because it is less than budgeted (costs are lower). The overall variance is: $120,000 ($190,000 - $70,000)...
View Full Document

  • Fall '13
  • JeanCooper

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Ask Expert Tutors You can ask You can ask ( soon) You can ask (will expire )
Answers in as fast as 15 minutes