HEALTHCARE FINANCE ACCOUNTING QUESTION.The administrator of Appomattox Nursing Home is very aware of needing to keep his cost down since he just negotiated a new arrangement with a large insurance company that will pay him a fixed amount per patient day.
HEALTHCARE FINANCE ACCOUNTING QUESTION.The administrator of Appomattox Nursing Home is very aware of needing to keep his cost down since he just negotiated a new arrangement with a large insurance company that will pay him a fixed amount per patient day.
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The administrator of Appomattox Nursing Home is very aware of needing to keep his cost down since he just negotiated a new arrangement with a large insurance company that will pay him a fixed amount per patient day. Listed below are budgeted and actual expenses for the previous month.
Actual patient days were 30,000 compared to budgeted patient days of 24,000.
Budgeted Costs @ 24,000 Patient Days
Budgeted Cost Per Unit
Actual Costs @ 30,000 Patient Days
Pharmacy Costs Variable
$100,000
$4.167
$140,000
Misc Supplies Costs Variable
$56,000
$2.333
$67,500
Fixed Overhead Costs
$708,000
$29.50
$780,000
Total
$864,0000
$36.00
$987,500
a. Determine the total variance associated with the planned and actual expenses.
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