Review the attached financial statement and related budget. Identify the signifi
ID: 2496655 • Letter: R
Question
Review the attached financial statement and related budget. Identify the significant variances. There are ten of them. Remember that a significant variance is one that deviates from the budget by more than 5%. Once you have identified the variances, 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.
Assignment of Points: There are ten significant variances to budget in the financial statement. There are three parts to the assignment:
Revenue
Actual
Budgeted
Variance
insurance revenue
$411,905
$465,222
supplemental income
$26,502
$25,589
other operating income
$5,682
$5,485
Total Revenue
$444,089
$496,296
Operating Expenses
Staffing
RN salary
$148,999
$140,852
RT salary
$37,459
$36,582
PT/OT/ST salary
$26,212
$27,414
administrative salary
$55,219
$56,211
management salary
$25,145
$24,318
housekeeping salary
$10,555
$10,555
dietary salary
$5,500
$5,469
Benefits
health insurance
$6,182
$6,028
life insurance
$464
$452
dental insurance
$309
$301
403b contributions
$12,364
$12,056
education
$93
$90
Taxes
payroll
$9,273
$9,042
workers comp
$77
$75
FICA
$7,727
$7,535
Medicare
$6,800
$6,631
Social Security
$3,709
$3,617
Administrative
office supplies
$510
$500
postage
$148
$150
telephone
$355
$350
marketing
$1,700
$1,500
legal fees
$600
$100
accounting
$207
$200
travel
$56
$50
liability insurance
$215
$215
malpractice insurance
$2,658
$1,540
mortgage
$3,500
$3,500
property taxes
$105
$105
Medical Supplies
general medical
$1,450
$1,400
pharmacy
$7,500
$4,800
Oxygen & RT
$1,190
$1,200
X-ray
$575
$600
lab
$480
$500
Dietary
food
$1,545
$1,500
enteral feedings
$4,700
$3,600
Maintenance
housekeeping supplies
$145
$150
laundry
$95
$100
groundskeeping
$0
$0
snow removal
$380
$320
Utilities
electric
$362
$368
water
$590
$588
sewer
$240
$231
garbage disposal
$152
$152
shredding
$46
$47
fuel
$199
$56
cable TV
$189
$189
internet service
$205
$205
Total Operating Expenses
$386,183
$371,445
Bad Debt Expense
$26,210
$26,523
Total Expenses
$412,393
$397,968
Net Income
$31,696
$98,328
Revenue
Actual
Budgeted
Variance
insurance revenue
$411,905
$465,222
supplemental income
$26,502
$25,589
other operating income
$5,682
$5,485
Total Revenue
$444,089
$496,296
Operating Expenses
Staffing
RN salary
$148,999
$140,852
RT salary
$37,459
$36,582
PT/OT/ST salary
$26,212
$27,414
administrative salary
$55,219
$56,211
management salary
$25,145
$24,318
housekeeping salary
$10,555
$10,555
dietary salary
$5,500
$5,469
Benefits
health insurance
$6,182
$6,028
life insurance
$464
$452
dental insurance
$309
$301
403b contributions
$12,364
$12,056
education
$93
$90
Taxes
payroll
$9,273
$9,042
workers comp
$77
$75
FICA
$7,727
$7,535
Medicare
$6,800
$6,631
Social Security
$3,709
$3,617
Administrative
office supplies
$510
$500
postage
$148
$150
telephone
$355
$350
marketing
$1,700
$1,500
legal fees
$600
$100
accounting
$207
$200
travel
$56
$50
liability insurance
$215
$215
malpractice insurance
$2,658
$1,540
mortgage
$3,500
$3,500
property taxes
$105
$105
Medical Supplies
general medical
$1,450
$1,400
pharmacy
$7,500
$4,800
Oxygen & RT
$1,190
$1,200
X-ray
$575
$600
lab
$480
$500
Dietary
food
$1,545
$1,500
enteral feedings
$4,700
$3,600
Maintenance
housekeeping supplies
$145
$150
laundry
$95
$100
groundskeeping
$0
$0
snow removal
$380
$320
Utilities
electric
$362
$368
water
$590
$588
sewer
$240
$231
garbage disposal
$152
$152
shredding
$46
$47
fuel
$199
$56
cable TV
$189
$189
internet service
$205
$205
Total Operating Expenses
$386,183
$371,445
Bad Debt Expense
$26,210
$26,523
Total Expenses
$412,393
$397,968
Net Income
$31,696
$98,328
Explanation / Answer
Variance (in amount )= Budgeted-Actual
Variance (in %tage Terms) = Variance (in amount)/Budgeted * 100
..
Apply this formula and Solve the question
..
For Example,
In the above , Insurance Revenue Variance is a significant variance since greater than 5%.
..
Likewise solve for the rest .
Revenue Actual Budgeted Variance(Amount) Variance (%) insurance revenue 411,905 465,222 53,317 11.46% supplemental income 26,502 25,589 913 3.57% other operating income 5,682 5,485 197 3.59% Total Revenue 444,089 496,296 10.52%Related Questions
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