Acc – you have been asked by management to explain the variances in


You have been asked by management to explain the variances in costs under your n patient capitated contract. The following data is provided. Use the following data to calculate the variances.




Inpatient Costs






Admission Rate



Case Mix Index



Cost per Case (CMI = 1.0)






Problem 1: What dollar amount of the total variance is attributed to Enrollment Variance?


Problem 2: What dollar effect did the increased admission rate have on cost?


Problem 3: The intensity of care delivered dropped from a budgeted case mix of 0.90 to an actual case mix of 0.85. What dollar effect did this have on actual costs?


Problem 4: Costs per case increased to $4,900 from a budgeted value of $4,750. This increased actual total costs by what amount?


Problem 5: Using the information in the table below, calculate the amount of the unfavorable rate variance. Then select the letter from the list below that shows the correct answer.








Revenue per unit







a) $400,000


b) $570,000


c) $970,000


d) $600,000


e) cannot calculate with given information


Problem 6: Using the information in the table below, determine how much of the supplies variance is due to a change in volume. Then select the letter from the list below that shows the correct answer.










Fixed Labour$20,000$22,250$2,250

a) $ 900
b) $1,000
c) $1,050
d) $1,250
e) $1,500




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