PUT IN EXCEL $*******$

Carroll Clinic: New $2020$ Results

I. Volume:

A$.$ FFS

B$.$ Capitated lives

$34,000$ visits

$31,000$ members

Number of

member$-$months

$372,000$

Actual utilization per

$($continued$)$II$.$ Revenues:

A$.$ FFS

B$.$ Capitated lives

$

per visit

$\frac{952,000}{2\mathrm{.}75}$ actual visits

$372,000$ actual member$-$months

C$.$ Total actual revenues $\frac{\text{\$}1,023,000}{\text{\$}1,975,000}$

III. Costs:

A$.$ Variable Costs:

Variable cost per visit $$,17\mathrm{.}72,($$$1,368,00077,200)$

B$.$ Fixed Costs:

Overhead, plant, and

equipment

C$.$ Total actual costs

IV$.$ Profit and Loss Statement:

Revenues:

Costs:

Variable:

FFS

$$602,487$

Capitated

Total

Contribution margin

Fixed costs

Actual profit

Assume the results reported in problem $8\mathrm{.}4$ hold, except that a

difference existed among budgeted $($static$)$ enrollment and realized

enrollment. The corrected results are presented above.

a$.$ Construct Carroll's flexible budgets for $2020.($Hint: Because

of a change in enrollment, creating three flexible budgets is

necessary. See the note to exhibit $8\mathrm{.}7.)$

b$.$ What are the profit variance, revenue variance, and cost variance?c$.$ Focus on the revenue side. What is the volume variance? The

price variance? Break the volume variance into enrollment and

utilization components. How does your answer here differ from

your corresponding answer to problem $8\mathrm{.}4?$

d$.$ Now consider the cost side. What are the volume and

management variances? Break down the management variance

into labor, supplies, and fixed costs variances.

e$.$ Interpret your results. In particular, focus on the differences

between the variance analysis here and the one in problem $8\mathrm{.}4.$