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Healthcare Finance Accounting Question - Appomattox Nursing Home _Budget and Variances




Question;The administrator of;Appomattox Nursing Home is very aware of needing to keep his cost down since he;just negotiated a new arrangement with a large insurance company that will pay;him a fixed amount per patient day. Listed below are budgeted and;actual expenses for the previous month.;Actual patient days were;30,000 compared to budgeted patient days of 24,000.;Budgeted Costs @ 24,000 Patient;Days;Budgeted Cost Per Unit;Actual Costs @ 30,000 Patient Days;Pharmacy Costs Variable;$100,000;$4.167;$140,000;Misc Supplies Costs Variable;$56,000;$2.333;$67,500;Fixed Overhead Costs;$708,000;$29.50;$780,000;Total;$864,0000;$36.00;$987,500;a. Determine the total variance;associated with the planned and actual expenses.;b. Prepare a flexible budget of expense at;30,000 patient days.;c. Determine the ?Spending Variance?;which is defined as Actual costs less costs budgeted at actual;volume.


Paper#44656 | Written in 18-Jul-2015

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