wk 8 assignment 1 - please provide formulas to answers Exercise A EYE SURGICAL C

Question

wk 8 assignment 1 - please provide formulas to answers

Exercise A EYE SURGICAL CENTER CATEGORY PLANNED ACTUAL Surgical Volume 1200 1400 Durable Medical Equipment Revenue $        12,000 $        15,000 Surgery Revenue $      500,500 $      750,750 Parking Revenue $        15,000 $        17,000 Instructions: 1. Determine the total variance between the planned and actual budgets. 2. Determine the service-related revenues and calculate variance still unexplained. 3. Prepare a flexible budget estimate. Present side-by side the budget, flexible budget estimate, and the acutal surgical revenue (and related volume). 4. Determine what variance is due to change in volume and what variance is due to change in rates. 5. Determine the volume variance and rate variance based on per unit rates.

Explanation / Answer

Solution:

1) Determining the Total Variance Between the Planned and Actual Budgets:

2) Determining the Service Related Revenues and Calculation of the Variance Still Unexplained:

3) Preparing a Flexible Budget Estimate:

4) Determining what Variance is Due to Change in Volume and What Variance is Due to Change in Rate:

5) Determining the Volume Variance and Rate Variance Based on Per Unit Rates:

Given Planned Actual (A) Surgical volume 1,200 1,400 (B) Durable medical equipment revenues $12,000 $15,000 (C) Surgery revenues $500,500 $750,750 (D) Parking revenues $15,000 $17,000

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