20. Use the information from the previous problem. Instead of using the step-down method of cost allocation, a company decided to use the direct method. What is your allocation rate for human resources?

$________ per employee

Possible answers: 40, 66.67

21. Baptist Hospital has visits from a charge-based FFS payer. Baptist has the information below that can help you identify how profitable it is on FFS basis. The payer now wants to move all 50 of its enrollees to a capitation system. What per member per month (PMPM) rate must be set on these patients to maintain the current profit level? $_________ (round to two decimal places)

FFS revenues per visit = $20

Variable cost per visit = $5

Fixed cost (annual) = $300

FFS Visits (annual) = 100

22. A hospital accepts both fee for service (FFS) and capitation payers and breaks out its revenues into FFS revenue and capitated revenue. The hospital created a static budget prior to the year and now the actual results are available so it is completing a flexible budget. If the actual number of visits for its capitated patients was higher than the budgeted number of visits (from the static budget), the total revenues for the capitated group on the flexible budget would be ________?
    1. Higher than on the static budget
    2. The same as on the static budget
    3. Lower than on the static budget

23. A hospital accepts both fee for service (FFS) and capitation payers. The hospital created a static budget prior to the year and now the actual results are available so it is completing a flexible budget. If the actual number of visits for its capitated patients was higher than the budgeted number of visits (from the static budget), the total costs for the capitated group on the flexible budget would be ________?
    4. Higher than on the static budget
    5. The same as on the static budget
    6. Lower than on the static budget

24. Use the information below to answer the next two questions.

Budgeted:
# of FFS Visits = 200
# of Capitated Visits = 50
Revenue per visit = $50
PMPM Revenue = $10
Member months = 100
Variable Cost per Visit = $20
Fixed costs = $2,000
Actual:
# of FFS Visits = 300
# of Capitated Visits = 100
Revenue per visit = $60
PMPM Revenue = $10
Member months = 200
Variable cost per visit = $25
Fixed costs = $3,000
	Static (Budgeted)	Flexible	Actual
Revenues:
FFS	10,000		18,000
Capitated	1,000		2,000
Total Revenues	11,000		20,000
Costs:
Variable:
FFS	4,000		7,500
Capitated	1,000		2,500
Total Variable Costs	5,000		10,000
Fixed Costs	2,000		3,000
Total Costs	7,000		13,000
Profit	4,000		7,000

Calculate the volume variance for revenue. If the variance is negative put a in front of the number (i.e. -200) $_______________

25. Using the information from the previous problem, calculate the price variance for revenue. If the variance is negative put a in front of the number (i.e. -200). $____________