Please check my work, thank you. Any additional comments are welcome. :)

ABC Physician Corporation For Month Ended June 30, 2003 Note: 20000 HMO lives at $20 per member/ per month Static Assumptions HMO/Visits FFS visits Total Revenue HMO/Premiun Revenue FFS visits Total Costs Variable HMO visits FFS visits Total Total Contribution Margin Fixed Costs Profit/Loss Flexible 17000 35000 52000 $ $ $ $ $ $ $ 340,000 1,750,000 2,090,000 $ 425,000 1,050,000 1,475,000 615,000 600,000 15,000 $ $ $ $ $ $ Actual 19500 33000 52500 19500 33000 52500 400,000 1,650,000 2,050,000 ### 1,485,000 1,885,000 487,500 990,000 1,477,500 572,500 600,000 (27,500) $ $ $ $ $ $ 624,000 1,056,000 1,680,000 205,000 600,000 (395,000) 1) Calucate Profit Variance (actual profit- static profit) (-395,000)-15,000= -410,000 below standard/ less than expected - negative variance 2) Calculate Revenue Variance (actual revenues-static revenues) 1,885,000-2,090,000= -205,000 below standard/less than expected - negative variance 3) Calculate Price Variance (actual revenues-flexible revenues) 1,885,000-2,050,000= -165,000 below standard/less than expected - negative variance 4) Calculate Cost Variance (static costs-actual costs) 1,475,000-1,680,000= -205,000 below standard/less than expected - negative variance 5) Calculate Cost Volume Variance 2,050,000-2,090,000= -40,000 (flexiable revenues-static revenues) below standard/less than expected - negative variance, larger volume then expected resulted in higher costs 6) Calculate Management Variance 1, 477, 500-1, 680,000= -202,500 (Flexable costs- actual costs) Negative variance may be the result of bad management 7) What other information would be useful? Investigation into labor and supply. Are resources being used too much and/or costing too much? 8) How do you interpret these variances? Please see comments next to each calculation