Chelsea Clinic projected the following budget information for 2020: Total FFS Visit Volume 90,000 visits Payer Mix: Blue Cross Highmark Reimbursement Rates: Blue Cross Highmark Variable Costs Resource Inputs: Labor Supplies Resource Input Prices: Labor Supplies Fixed Costs (overhead, plant, and equipment) 40% 60% $25 per visit $20 per visit 48,000 total hours 100,000 total units $25.00 per hour $1.50 per unit $500,000 a. Construct Chelsea Clinic’s operating budget for 2020. b. Discuss how each key budget assumption might result in a budget variance, and name the variance that would be used to examine results associated with each assumption.
Chelsea Clinic projected the following budget information for 2020: Total FFS Visit Volume 90,000 visits Payer Mix: Blue Cross Highmark Reimbursement Rates: Blue Cross Highmark Variable Costs Resource Inputs: Labor Supplies Resource Input Prices: Labor Supplies Fixed Costs (overhead, plant, and equipment) 40% 60% $25 per visit $20 per visit 48,000 total hours 100,000 total units $25.00 per hour $1.50 per unit $500,000 a. Construct Chelsea Clinic’s operating budget for 2020. b. Discuss how each key budget assumption might result in a budget variance, and name the variance that would be used to examine results associated with each assumption.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Chelsea Clinic projected the following budget information for 2020: Total FFS Visit Volume 90,000 visits Payer Mix: Blue Cross Highmark Reimbursement Rates: Blue Cross Highmark Variable Costs Resource Inputs: Labor Supplies Resource Input Prices: Labor Supplies Fixed Costs (overhead, plant, and equipment) 40% 60% $25 per visit $20 per visit 48,000 total hours 100,000 total units $25.00 per hour $1.50 per unit $500,000
a. Construct Chelsea Clinic’s operating budget for 2020.
b. Discuss how each key budget assumption might result in a
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