Reference no: EM131569976
Q1) What is the relationship among accountability, responsibility, and authority with respect to a responsibility center?
Q2) Identify each responsibility enter below as either a service center, cost center (clinical or administrative), profit center (captiated or administrative), or investment center. Explain choices
1. Radiology dept that must control its own costs
2. Hospital admitting department
3. HMO
4. Stand-alone outpatient clinic hat must earn a 10 % ROI
5. Volunteer dept with no budget
6. Development office- profit center
Q3) What are the differences among a line-item, a program, and a performance budget?
Q4) The following are planned and actual revenues for Cutting Edge Surgery Center. Because they are one of four surgery centers in the community, the administrator is concerned with his rates in relation to those of his competitors.
Givens Planned Actual
Surgical volume 2,500 2,700
gift shop revenues $19,000 $20,000
surgery revenues $600,500 $850,750
parking revenues $16,000 $18,000
a. Determine the total variance between the planned and actual budgets.
b. Determine the service-related revenues and calculate service-related variance still unexplained.
c. make flexible budget estimate. Present side by side the budget, flexible budget estimate, and actual surgical revenues (and related volumes)
d) Determine what variance is due to change in volume and what variance is due to change rates.
e) Determine the volume variance and rate variance based on per unit rates.
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