Determine total variance between planned and actual budgets

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Reference no: EM133603882

Discussion Post: Finance and Economics in Healthcare Delivery- Why Do Good Budgets Go Bad?- Budgeting and Variance Analysis

Instructions:

The following are budgeted and actual revenues and expenses for a hospital:

	Budgeted	Actual
Actual
Surgical Volume	2,300	2,600
Gift Shop Revenues	$18,000	$19,000
Surgery Revenues	$589,500	$852,750
Parking Revenues	$17,000	$19,000
Expenses
Patients Days	26,000	25,000
Pharmacy	$119,000	$158,000
Misc. Supplies	$68,000	$795,600
Fixed Overhead Costs	$832,000	$890,000

To prepare:

1. Review the information in this week's Resources dealing with variance analysis, how it is calculated, and how it can be used in decision making, including the video Variance Analysis.

2. Use the Variance Discussion Case document, provided in the Resources, to calculate budget variances for the case presented. (document attached below)

Task

Post a description of your insight into the budget variances in the scenario. In your opinion, what can be done, in general, to manage budget variances? Propose some best practices and/or strategies for budget control, both in general and as to how it relates to your proposed healthcare product or service solution.

In preparation of your Discussion post submission, complete the following:

Question A. Determine the total variance between the planned and actual budgets for Surgical Volume. Is the variance favorable or unfavorable?

Question B. Determine the total variance between the planned and actual budgets for Patient Days. Is the variance favorable or unfavorable?

Question C. Consider which variances are potentially due to change in volume and which variances are potentially due to change in rates or other factors.

Reference no: EM133603882

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