Strayer HSA525 week 8 homework Exercise

Assignment

Exercise 17-1: Variance Analysis
Greenview Hospital operated at 120% of normal capacity in two of its
departments during the year. It operated 120% times 20,000 normal capacity
direct labor nursing hours in routine services and it operated 120% times
20,000 normal capacity equipment hours in the laboratory. The lab allocates
overhead by measuring minutes and hours the equipment is used; thus equipment
hours.

Assumptions: For Routine Services Nursing: •
20,000 hours X 120% = 24,000 direct labor nursing hours. • Budgeted Overhead at
24,000 hours = $42,000 fixed plus $6,000 variable = $48,000 total. • Actual
Overhead at 24,000hours = $42,000fixed plus $7,000variable = $49,000 total. •
Applied Overhead for 24,000 hours at $2.35 = $56,400. For Laboratory: • 20,000
hours X 120% = 24,000 equipment hours. • Budgeted Overhead at 24,000 hours =
$59,600 fixed plus $11,400variable = $71,000 total. • Actual Overhead at 24,000
hours = $59,600 fixed plus $11,600 variable = $71,200 total. • Applied Overhead
for 24,000 hours at $3.455 = $82,920. Required

1. Set up a worksheet for applied
overhead costs and volume variance with a column for Routine Services Nursing
and a second column for Laboratory.

2. Set up a worksheet for actual overhead
costs and budget variance with a column for Routine Services Nursing and a
second column for Laboratory.

3. Set up a worksheet for volume variance and
budget variance totaling net variance with a column for Routine Services
Nursing and a second column for Laboratory.

4. Insert input data from Assumptions.

5. Complete computations for all three
worksheets.

Assignment Exercise 17-2:

Three-Level Revenue Forecast Three
eye-ear-nose-and-throat physicians decide to hire an experienced audiologist in
order to add a new service line to their practice.

*They ask the practice manager to
prepare a three-level volume forecast as a first step in their decision-making.

Assumptions: for the base level (most
likely) revenue forecast, assume $200 per procedure times four procedures per
day times five days equals 20 procedures per week times 50 weeks per year equals
1,000 potential procedures per year. For the best case revenue forecast, assume
an increase in volume of one procedure per day average, for an annual increase
of 250 procedures (5 days per week times 50 weeks equals 250). (The best case
is if the practice gains a particular managed care contract.) For the worst
case revenue forecast, assume a decrease in volume of two procedures per day
average, for an annual decrease of 500 procedures. (The worst case is if the
practice loses a major payer.)

·
Audiologists were designated as
“eligible for physician and other prescriber incentives” as discussed
in Chapter 20. Thus the new service line was a logical move. Required Using the
above assumptions, prepare a three-level forecast similar to the example in
Fig- ure 17-5 and document your calculations. Assignment

Exercise 17-3:

Target Operating Income Acme Medical Supply Company
desires a target operating income amount of $100,000, with assumption inputs as
follows: • Desired (target) operating income amount = $100,000 • Unit price for
sales = $80 • Variable cost per unit = $60 • Total fixed cost = $60,000 Compute
the required revenue to achieve the target operating income and compute a
contribution income statement to prove the totals. Assignment

Exercise 18-1: Estimate of Loss You are the
practice manager for a four-physician office. You arrive on Monday morning to
find the entire office suite flooded from overhead sprinklers that
malfunctioned over the weekend. Water stands ankle-deep everywhere. The
computers are fried and the contents of all the filing cabinets are soaked.
Your own office, where most of the records were stored, has the worst damage.
The practice carries valuable papers insurance coverage for an amount up to
$250,000. It is your responsibility to prepare an estimate of the financial
loss so that a claim can be filed with the insurance company. How would you go
about it? What would your summary of the losses look like?

Exercise 18-2: Estimate of Replacement Cost The
landlord carries contents insurance that should cover the damage to the
furnishings, equipment, and to the computers, and the insurance company
adjuster will come tomorrow to assess the furnishings and equipment damage.
However, your boss is sure that the insurance settlement will not cover
replacement costs. Consequently, you have been instructed to prepare an
estimate of what has been lost and/ or damaged plus an estimate of what the
replacement cost might be. How would you go about it? What would your summary
of these losses look like?

Exercise 18-3: Benchmarking Review the chapter text
about benchmarking.

Required 1. Select either the MHS case study in
Chapter 25 or one of the organizations represented by a mini-case study in
Chapters 27, 28, or 29.

2. Prepare a list of measures that could be
benchmarked for this organization. Comment on why these items are important for
benchmarking purposes.

3. Find another example of benchmarking for a
healthcare organization. The example can be an organization report or it can be
taken from a published source such as a journal article.

Explanation & Answer

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