variance analysis, case study 5 help

Jul 24th, 2016
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Question description

The subsequent two spreadsheets provide workload (expressed as relative weighted products (RWPs) for inpatient care), revenue, and expense data for Schumpert Medical Center covering their fiscal years 2010 and 2011. The data includes FY10 actual workload, revenues, and expenses; FY11 forecasted workload, revenues, and expenses; and FY11 year-to-date workload, revenues, and expenses. The Inpatient Product Lines worksheet provides further details on the types of services provided within each major service line. Using the available data, perform a variance analysis on Schumpert Medical Center and answer the following questions: 1. What was the hospital's original profit forecast (assume away any issues with depreciation, taxes, etc.)? Halfway through the fiscal year, what is the hospital's revised projection for FY11 profits? Answer: 2. Which inpatient service lines are overbudget? Which product lines are overbudget after accounting for workload increases? Answer: 3. What actions would you take at the mid-year point if you were a fee-for-service hospital? In other words, where are the problem areas on which you would focus your attention, and who might provide ideas for "best practices" based on their performance? Answer: 4. What actions would you take at the mid-year point if you were a capitated hospital? In this case, the revenue spreadsheet would be replaced with an overall budget of $50 million with which to operate (rather than being able to bill for each episode of patient care). Federal, state, county, and city hospitals normally operate under a capped budget. Additionally, many HMOs also operate under a fixed Per Member, Per Month (PMPM) capitated process. Answer:

 Variance_Analysis_Case_Study_Week 5.xlsx


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Variance
analysis assignment

Name

Course

Institution

Lecturer
A budget variance arises in the funds
due to discrepancies between the actual and predicted cost and revenues in
specified accounts. The budget variances may probably vary because of a
shortfall in revenue due to errors that may come by when estimating the
expenditures. Also, it caused by spontaneous and unexpected spikes in operation
cost, which are unavoidable.

Question 1

Hospital
original profit forecast FY11

Projected
IP revenue for FY11 $ 50155710

Projected
expenditure for F11 $ 48069860

Projected
profit for FY11= Projected revenue – projected expenditures= $ 2085850

Revised
projection

Actual
IP revenue = $24220949

Actual
IP expenditure= $25256062

Actual
profit = $ - 1035113

Question
2




Service



STANDARD
FY11 BUDGET($)


ACTUAL
FY11 BUDGET ($)


OVERBUDGET
($)




CIRC


4202356


2472822


1729534




DIGEST


6737188


4356173


2381015




ENT


754842


462822


292020




GYN


1268947


777322


491625




MENTAL
HEALTH


714283


400730


313553




NERVOUS


1324119


675173


648946




NEWBORN


4256926


2971020


1285906




OB


8717115


5472892

...

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