Healthcare Finance Accounting Question – Appomattox Nursing Home _Budget and Variances

$13.00

Description

The administrator of
Appomattox Nursing Home is very aware of needing to keep his cost down since he
just negotiated a new arrangement with a large insurance company that will pay
him a fixed amount per patient day. Listed below are budgeted and
actual expenses for the previous month.

Actual patient days were
30,000 compared to budgeted patient days of 24,000.

Budgeted Costs @ 24,000 Patient
Days

Budgeted Cost Per Unit

Actual Costs @ 30,000 Patient Days

Pharmacy Costs Variable

$100,000

$4.167

$140,000

Misc Supplies Costs Variable

$56,000

$2.333

$67,500

Fixed Overhead Costs

$708,000

$29.50

$780,000

Total

$864,0000

$36.00

$987,500

a. Determine the total variance
associated with the planned and actual expenses.

b. Prepare a flexible budget of expense at
30,000 patient days.

c. Determine the “Spending Variance”
which is defined as Actual costs less costs budgeted at actual
volume.

Reviews

There are no reviews yet.

Be the first to review “Healthcare Finance Accounting Question – Appomattox Nursing Home _Budget and Variances”

Your email address will not be published. Required fields are marked *