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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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