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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

 

Paper#80698 | Written in 18-Jul-2015

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