. Chela Clinic projected the following budget information for 2015 90,000 visits

Question

. Chela Clinic projected the following budget information for 2015 90,000 visits Total FFS Visit Volume Payer Mix Blue Cross 40% 60'% Highmark Reimbursement Rates: $25 per visit $20 per visit Blue Cross Highmarlk Variable Costs Resource Inputs 48,000 total hours 100,000 total units Labor Supplies Labor Supplies Resource Input Prices: $25.00 per hour $1. 50 per unit $500,000 Fixed Costs (overhead plant, and equipment) a. Construct Chelsea Clinic's operating budget for 2015 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

Explanation / Answer

Operating Budget Part a Particulars Blue Cross High Marks Reimbursement 900000 1080000 (36000*25) (54000*20) Labour 480000 720000 (48000*25)*40% (48000*25)*60% Supplies 600000 900000 (100000*1.5)*40% (100000*1.5)*60% Fixed Cost 200000 300000 (500000*40%) (500000*60%) Part b Variences that would be used to examine results would be Labour cost varience, overhead Varience

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