Question

You are responsible for completing a budget for an Ambulatory Clinic. Here are the assumptions: 6 INITIAL BUDGET 7 a. The budget anticipated 40,000 inpatient days this year at an average of $750 per day. b. Inpatient expenses were budgeted at $650 per day. c. The budget anticipated 12,000 outpatient visits this year at an average of $475 revenue 9 10 11 per visit. d. Outpatient expenses were budgeted at $420 per visit. 12 13 14 ACTUAL RESULTS 15 16 a. Assume that only 34,800 or 87% of the inpatient days are going to actually be achieved 17 for the year. 18 b. The average revenue of $750 per day will be achieved for these 34,800 inpatient days. c. The Outpatient visits will actually amount to 120 % or 13 ,400 for the year. 19 20 d. The average revenue of $475 per visit will be achieved for these 13,400 visits. e. Actual inpatient expenses will amount to $13,700,000 and actual outpatient expenses will amount to $4,620,000. 21 22 23 24 25 REQUIRED

Answer 1

AS BUDGETED
				Amount($)			Calculation
Revenue Inpatient				30000000			40000*750
Revenue Outpatient				5700000			12000*475
	Subtotal			35700000
Expenses - Inpatients				26000000			40000*650
Expenses - Outpatients				5040000			12000*420
	Subtotal			31040000
Excess of Revenue over Expenses				4660000
ACTUAL
				Amount($)
Revenue Inpatient				26100000			34800*750
Revenue Outpatient				6365000			13400*475
	Subtotal			32465000
Expenses - Inpatients				13700000
Expenses - Outpatients				4620000
	Subtotal			18320000
Excess of Revenue over Expenses				14145000
Comparison
				Budget	Actual	Static Budget Variance
Revenue Inpatient				30000000	26100000	3900000
Revenue Outpatient				5700000	6365000	-665000
	Subtotal			35700000	32465000	3235000
Expenses - Inpatients				26000000	13700000	12300000
Expenses - Outpatients				5040000	4620000	420000
	Subtotal			31040000	18320000	12720000
Excess of Revenue over Expenses				4660000	14145000	-9485000
This means that we have earned $9485000 over budgeted revenue

Note :

There is a fault in the question -

It says actual outpatients is 120% of 12000 which comes out to be 14400

But they have given it as 13400 , so I have done it according to 13400. You can also do adjustment in value by taking 14400 instead of 13400 .

For this I have shown calculation in the last column.