Question 2: Examine Memorial Hospital's Budget Data. Below is the hospital's static budget, flexible budget and actual realizations for the year. We assume no change in enrollment, therefore, the data below is enough to answer the following questions: Static Budget Flexible Budget Actual Results Assumptions: FFS visits Capitated visits Total 36,000 54,000 90,000 34,000 45,000 79,000 34,000 45,000 79,000 Revenues: FFS Capitated Total $900,000 1,080,000 $1,980,000 $850,000 1,090,000 $1,940,000 $962,000 990,000 $1,952,000 Costs: Variable: FFS Capitated Total variable $540,000 810,000 $1,350,000 $510,000 649,000 $1,159,000 $602,487 765,813 $1,368,300 Fixed costs Total costs 500,000 $1,850,000 500,000 $1,659,000 540,000 $1,908,300 Profit $130,000 $281,000 $43,700 Did the hospital receive more or less volume than expected? Explain. [2 pts.] Are actual revenues more than expected? (3 pts.] Are actual costs more than expected? (3 pts.] Calculate the profit variance? Briefly Interpret your answer. Show all your work including formula or lose points [4 pts.] Calculate the revenue variance? Briefly Interpret your answer. Show all your work including formula or lose points (4 pts.] Calculate the cost variance? Briefly Interpret your answer. Show all your work including formula or lose points (4 pts.] How much (in dollar amount) of the revenue variance is attributed to volume? Calculate and Briefly Interpret. Show all your work including formula or lose points [4 pts.] Calculate the management variance on the cost side? Interpret. Show all your work including formula or lose points (4 pts.] What variance component you calculated does this higher/lower performance is mostly explained by? (be as specific and detailed as possible). Explain [4 pts.] What kind of actions can management take to improve/sustain performance in the future? Explain (4 pts.] Question 2: Examine Memorial Hospital's Budget Data. Below is the hospital's static budget, flexible budget and actual realizations for the year. We assume no change in enrollment, therefore, the data below is enough to answer the following questions: Static Budget Flexible Budget Actual Results Assumptions: FFS visits Capitated visits Total 36,000 54,000 90,000 34,000 45,000 79,000 34,000 45,000 79,000 Revenues: FFS Capitated Total $900,000 1,080,000 $1,980,000 $850,000 1,090,000 $1,940,000 $962,000 990,000 $1,952,000 Costs: Variable: FFS Capitated Total variable $540,000 810,000 $1,350,000 $510,000 649,000 $1,159,000 $602,487 765,813 $1,368,300 Fixed costs Total costs 500,000 $1,850,000 500,000 $1,659,000 540,000 $1,908,300 Profit $130,000 $281,000 $43,700 Did the hospital receive more or less volume than expected? Explain. [2 pts.] Are actual revenues more than expected? (3 pts.] Are actual costs more than expected? (3 pts.] Calculate the profit variance? Briefly Interpret your answer. Show all your work including formula or lose points [4 pts.] Calculate the revenue variance? Briefly Interpret your answer. Show all your work including formula or lose points (4 pts.] Calculate the cost variance? Briefly Interpret your answer. Show all your work including formula or lose points (4 pts.] How much (in dollar amount) of the revenue variance is attributed to volume? Calculate and Briefly Interpret. Show all your work including formula or lose points [4 pts.] Calculate the management variance on the cost side? Interpret. Show all your work including formula or lose points (4 pts.] What variance component you calculated does this higher/lower performance is mostly explained by? (be as specific and detailed as possible). Explain [4 pts.] What kind of actions can management take to improve/sustain performance in the future? Explain (4 pts.]