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HCOs Variances Sol

The document shows budget and actual figures for number of acute myocardial infarction cases, revenue and expenses per case. There was a higher than budgeted number of cases which led to higher total revenue but lower unit contribution margin due to higher than budgeted variable expenses per case. The higher expenses were driven by more days and tests per case compared to budget.

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Simon Olly
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25 views3 pages

HCOs Variances Sol

The document shows budget and actual figures for number of acute myocardial infarction cases, revenue and expenses per case. There was a higher than budgeted number of cases which led to higher total revenue but lower unit contribution margin due to higher than budgeted variable expenses per case. The higher expenses were driven by more days and tests per case compared to budget.

Uploaded by

Simon Olly
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Acute MI

Budget Actual
Number of cases 150 175
Revenue per case $ 6,000 $ 5,700
Variable expenses per case $ 2,615 $ 2,782
Routine care
# of days per case 15 17
expenses per day $ 150 $ 140
expenses per case $ 2,250 $ 2,380
Radiology
# of films per case 5.00 6.00
expenses per film $ 25 $ 24
expenses per case $ 125 $ 144
Laboratory
# of tests per case 8 8
expenses per test $ 15 $ 21
expenses per case $ 120 $ 168
Pharmacy
# of units per case 40.00 45.00
expenses per unit $ 3 $ 2
expenses per case $ 120 $ 90
Unit contribution margin $ 3,385 $ 2,918
Acute MI
Budget Actual
Number of cases 150 175
Revenue per case $ 6,000 $ 5,700
Variable expenses per case $ 2,615 $ 2,782
Routine care
# of days per case 15 17
expenses per day $ 150 $ 140
expenses per case $ 2,250 $ 2,380
Radiology
# of films per case 5.00 6.00
expenses per film $ 25 $ 24
expenses per case $ 125 $ 144
Laboratory
# of tests per case 8 8
expenses per test $ 15 $ 21
expenses per case $ 120 $ 168
Pharmacy
# of units per case 40.00 45.00
expenses per unit $ 3 $ 2
expenses per case $ 120 $ 90
Unit contribution margin $ 3,385 $ 2,918
CONTRIBUTION MARGIN (Actual - Bdg) Check 1 Check 2
Tot CM variance =2.918 x 175 - 3.385 x 150 = $ 2,900 $ 2,900 $ 2,900
Volume variance = (175 - 150) x 3.385 = $ 84,625 $ 84,625
Unit contr marg variance = (2.918 - 3.385) x 175 = $ -81,725 $ -81,725

REVENUES (Act - BgT)


Tot rev variance =175 x 5.700 - 150 x 6.000 = $ 97,500 $ 97,500
Volume variance =(175-150) x 6000 = $ 150,000
Price variance = (5.700 - 6.000) x 175 = $ -52,500

VAR COSTS (Bdg - Act)


Tot var cost variance = (150 x 2.615 - 175 x 2.782) = $ -94,600 $ -94,600
Volume variance =(150-175)x 2.615 = $ -65,375
Unit var cost variance = (2.615 - 2.782) x 175 = $ -29,225 $ -29,225 $ -29,225

Breakdown of unit variable cost variance by operating units


Routine care = (2.250 - 2.380) x 175 = $ -22,750 $ -22,750
Radiology = (125 - 144) x 175 = $ -3,325 $ -3,325
Laboratory = (120 - 168) x 175 = $ -8,400 $ -8,400
Pharmacy = (120 - 90) x 175 = $ 5,250 $ 5,250

Breakdowun of unit variable cost variance by operating units and drivers


Resources per case variance
Routine care = (15-17) x 150 x 175 = $ -52,500
Radiology = (5-6) x 25 x 175 = $ -4,375
Laboratory = (8 - 8) x 15 x 175 = $ -
Pharmacy = (40 - 45) x 3 x 175 = $ -2,625
Total $ -59,500
Price/efficiency variance
Routine care = (150 - 140) x 17 x 175 = $ 29,750
Radiology =(25 - 24) x 6 x 175 = $ 1,050
Laboratory = (15 - 21) x 8 x 175 = $ -8,400
Pharmacy = (3 - 2) x 45 x 175 = $ 7,875
Total $ 30,275

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