Suggest two to three possible causes of each variance Finally, make two to three

Question

Suggest two to three possible causes of each variance

Finally, make two to three recommendations on how you would try to resolve each variance as a manager

Revenue

Actual

Budgeted

Variance

insurance revenue

$411,905

$465,222

-11.5%

1

supplemental income

$26,502

$25,589

3.6%

other operating income

$5,682

$5,485

3.6%

Total Revenue

$444,089

$496,296

-10.5%

Operating Expenses

Staffing

RN salary

$148,999

$140,852

5.8%

2

RT salary

$37,459

$36,582

2.4%

PT/OT/ST salary

$26,212

$27,414

-4.4%

administrative salary

$55,219

$56,211

-1.8%

management salary

$25,145

$24,318

3.4%

housekeeping salary

$10,555

$10,555

0.0%

dietary salary

$5,500

$5,469

0.6%

Benefits

health insurance

$6,182

$6,028

2.6%

life insurance

$464

$452

2.6%

dental insurance

$309

$301

2.6%

403b contributions

$12,364

$12,056

2.6%

education

$93

$90

2.6%

Taxes

payroll

$9,273

$9,042

2.6%

workers comp

$77

$75

2.6%

FICA

$7,727

$7,535

2.6%

Medicare

$6,800

$6,631

2.6%

Social Security

$3,709

$3,617

2.6%

Administrative

office supplies

$510

$500

2.0%

postage

$148

$150

-1.3%

telephone

$355

$350

1.4%

marketing

$1,700

$1,500

13.3%

3

legal fees

$600

$100

500.0%

4

accounting

$207

$200

3.5%

travel

$56

$50

12.0%

5

liability insurance

$215

$215

0.0%

malpractice insurance

$2,658

$1,540

72.6%

6

mortgage

$3,500

$3,500

0.0%

property taxes

$105

$105

0.0%

Medical Supplies

general medical

$1,450

$1,400

3.6%

pharmacy

$7,500

$4,800

56.3%

7

Oxygen & RT

$1,190

$1,200

-0.8%

X-ray

$575

$600

-4.2%

lab

$480

$500

-4.0%

Dietary

food

$1,545

$1,500

3.0%

enteral feedings

$4,700

$3,600

30.6%

8

Maintenance

housekeeping supplies

$145

$150

-3.3%

laundry

$95

$100

-5.0%

groundskeeping

$0

$0

#DIV/0!

snow removal

$380

$320

18.8%

9

Utilities

electric

$362

$368

-1.6%

water

$590

$588

0.3%

sewer

$240

$231

3.9%

garbage disposal

$152

$152

0.0%

shredding

$46

$47

-2.1%

fuel

$199

$56

255.4%

10

cable TV

$189

$189

0.0%

internet service

$205

$205

0.0%

Total Operating Expenses

$386,183

$371,445

4.0%

Bad Debt Expense

$26,210

$26,523

-1.2%

Total Expenses

$412,393

$397,968

3.6%

Net Income

$31,696

$98,328

-67.8%

Suggest two to three possible causes of each variance

Finally, make two to three recommendations on how you would try to resolve each variance as a manager

Revenue

Actual

Budgeted

Variance

insurance revenue

$411,905

$465,222

-11.5%

1

supplemental income

$26,502

$25,589

3.6%

other operating income

$5,682

$5,485

3.6%

Total Revenue

$444,089

$496,296

-10.5%

Operating Expenses

Staffing

RN salary

$148,999

$140,852

5.8%

2

RT salary

$37,459

$36,582

2.4%

PT/OT/ST salary

$26,212

$27,414

-4.4%

administrative salary

$55,219

$56,211

-1.8%

management salary

$25,145

$24,318

3.4%

housekeeping salary

$10,555

$10,555

0.0%

dietary salary

$5,500

$5,469

0.6%

Benefits

health insurance

$6,182

$6,028

2.6%

life insurance

$464

$452

2.6%

dental insurance

$309

$301

2.6%

403b contributions

$12,364

$12,056

2.6%

education

$93

$90

2.6%

Taxes

payroll

$9,273

$9,042

2.6%

workers comp

$77

$75

2.6%

FICA

$7,727

$7,535

2.6%

Medicare

$6,800

$6,631

2.6%

Social Security

$3,709

$3,617

2.6%

Administrative

office supplies

$510

$500

2.0%

postage

$148

$150

-1.3%

telephone

$355

$350

1.4%

marketing

$1,700

$1,500

13.3%

3

legal fees

$600

$100

500.0%

4

accounting

$207

$200

3.5%

travel

$56

$50

12.0%

5

liability insurance

$215

$215

0.0%

malpractice insurance

$2,658

$1,540

72.6%

6

mortgage

$3,500

$3,500

0.0%

property taxes

$105

$105

0.0%

Medical Supplies

general medical

$1,450

$1,400

3.6%

pharmacy

$7,500

$4,800

56.3%

7

Oxygen & RT

$1,190

$1,200

-0.8%

X-ray

$575

$600

-4.2%

lab

$480

$500

-4.0%

Dietary

food

$1,545

$1,500

3.0%

enteral feedings

$4,700

$3,600

30.6%

8

Maintenance

housekeeping supplies

$145

$150

-3.3%

laundry

$95

$100

-5.0%

groundskeeping

$0

$0

#DIV/0!

snow removal

$380

$320

18.8%

9

Utilities

electric

$362

$368

-1.6%

water

$590

$588

0.3%

sewer

$240

$231

3.9%

garbage disposal

$152

$152

0.0%

shredding

$46

$47

-2.1%

fuel

$199

$56

255.4%

10

cable TV

$189

$189

0.0%

internet service

$205

$205

0.0%

Total Operating Expenses

$386,183

$371,445

4.0%

Bad Debt Expense

$26,210

$26,523

-1.2%

Total Expenses

$412,393

$397,968

3.6%

Net Income

$31,696

$98,328

-67.8%

Explanation / Answer

Variance 1

Causes

Recommendation

Variance 2

Causes

Recommendation

Variance 3

Causes

Recommendation

Variance 4 to 10

Causes

Recommendation

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