The budget anticipated 30,000 inpatient days this year at anaverage of $650 revenue per day. • Inpatient expenses were budgetedat $600 per patient day. • The budget anticipated 10,000 outpatientvisitsthis year at an average of$400 revenue per visit. •Outpatient expenses were budgeted at $380 per visit. As to theactual results: • Assume that only 27,000, or 90%, of the inpatientdays are going to actually be achieved for the year. • The averagerevenue of$650 per day willbe achieved for these 270,000 inpatientdays. • The outpatient visitswill actually amount to 110%, or11,000 for the year. • The average revenue of $400 per visitwill beachieved for these 11,000 visits. • Further assume that, due to theheroic efforts of the Chief Financial Officer, the actual inpatientexpenses willamount to $11,600,000 and the actual outpatientexpenses willamount to $4,000,000. Required 1. Set up threeworksheets that follow the format of those in Example 15A.However,in each of your worksheets make two lines for revenue; label one asRevenue-Inpatient and the other Revenue-Outpatient. Add a RevenueSubtotal line. Likewise, make two lines for expense; label one asExpense-Inpatient and the other Expense-Outpatient. Add an ExpenseSubtotal line. 2. Using the new assumptions, complete the firstworksheet for “AsBudgeted.” 3. Using the new assumptions, completethe second worksheet for “Actual.” 4. Using the new assumptions,complete the third worksheet for “Static Budget Variance.”ifosignment Exercise 15-1: Budgeting Select an organization; eitherMetropolis Health Systemfrom the Chapter 25 Case Study or one ofthe organizations presented in the Mini-Case Studies in Chapters26-28. Required l. Using the organization selected, create a budgetfor the next fiscal year. Set out the details of all assumptionsyou needed in order to build this budget. 2. Use the “Checklist forBuilding a Budget” (Exhibit 15-2) and critique your own budget.signment Exercise 15-2: Budgeting Findan existing budget from a published source. Detail should beextensive enough to present a challenge. Chapter 15 391 Required 1.Using the existing budget, create a new budget for the nextfiscalyear. Set out the details of all the assumptions you neededin order to build this budget. 2. Use the “Checklist for Building aBudget” (Exhibit 15-2) and critique your own effort. 3. Use the”Checklist for Reviewing a Budget” (Exhibit 15-3) and critique theexisting budget. VAssignment Exercise 15-3: Transactions outsidethe Operating Budget ReviewFigure 15-2and the accompanying text.Metropolis Health System has received a wellness grant from thecharitable arm of an area electronics company. The grant will runfor twenty-four months, beginning at the first of the next fiscalyear. Two therapists and two registered nurses will each bespending half of their time working on the wellness grant. All fourindividuals are full-time employees of MHS. The electronics companyhas only recently begun to operate the charitable organization thatawarded the grant. While they have gained all the legal approvalsnecessary, they have not yet provided the manuals and instructionsfor grant transactions that MHSusually receives when grants areawarded. Consequently, guidance about separate accounting is notyet forthcoming from the grantor. Required How would you handlethis issue on the MHS operating budget for next year? 0ssignmentExercise 15-4: Identified versus Allocated Costs in BudgetingReviewFigure 15-3and the accompanying text. Metropolis HealthSystem is preparing for a significant upgrade in both hardware andsoftware for its information systems.As part of the project, theChief of Information Operations (CIO) has indicated that theInformation Systems (IS) department can change the format of theMHS operating budgets and related reports before the operatingbudget is constructed for the coming fiscal year.The ChiefFinancial Officer (CFO) has long wanted to modify what costs areidentified and what costs are allocated (along with the method ofallocation). This is a golden opportunity to do so. To gainammunition for the change, the CFO is preparing to conduct asurvey.The surveywill obtain a variety of suggestions for potentialchanges in allocation methods for the new operating budget reportformats. You have been selected as one of the employees who willbesurveyed. Required Youmay choose your role for this assignment, asfollows: Refer to the “MHS Executive-Level Organization Chart”(Figure 25-2 in the MHS Case Study). (1) Either (a) choose any typeof patient service that would be under the direction
ScholarMatic: Explanation & Answer
Your ready answer from a verified tutor is just a click away for as little as $14.99
Click Order Now to get 100% Original Answer Customized to your instructions!
