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MMHA 6400 Week 9 Assignment — Budgeting and Variance Analysis
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Healthcare Financial Management and Economics

 

Week 9 Assignment—Budgeting and Variance Analysis

 

Instructions:

 

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

 

                                                Budgeted                                         Actual

Revenues

 

Surgical Volume                              2,500                                                  2,700

 

Gift Shop Revenues                                   $19,000                                              $20,000

 

Surgery Revenues                          $600,500                                           $850,750

 

Parking Revenues                          $16,000                                              $18,000

 

Expenses

 

Patients Days                                   27,000                                                27,000

 

Pharmacy                                          $120,000                                           $160,000

 

Misc Supplies                                   $66,000                                              $77,500

 

Fixed Overhead Costs                    $808,000                                           $880,000

 

Using an Excel spreadsheet to 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 aside-by-side budget, flexible budget estimate, and the actual Surgical Revenues.
  6. Prepare a flexible budget estimate. Present aside-by-side budget, flexible budget estimate, and the actual Patient Expenses.
  7. Determine what variances are due to change in volume and what variances are due to change in rates. 
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