your answers only and submit a PDF version online.
There are TWO files associated with this The Haas Home Care Agency (excel file) and the Pacific Park School B Case (don’t worry about the questions in the actual case study).
1. (Volume budgeted – Volume actual) X Variable expense budgeted = __________ Select one:
a. Selling price variance
b. Expense volume variance
c. Contribution margin variance
d. Revenue price variance
2. What are the codes we use for inpatient billing that describes the patient’s ultimate reason for the hospitalization after study? Select one:
a. DRG
b. CPT
c. E/M
d. ICD-9
3. Bad debt adjustments / __________ X 100 = Bad debt rate. Select one:
a. Contractual adjustments
b. Gross charges
c. Total fixed expenses
d. Net patient services revenue
4. For questions 4-6, review last year's revenue and expense information for the Haas Home Care Agency (attached). Please note the number of visits for the year are at the top of the exhibit.
Prof. H has informed you that they are using a nursing agency to staff the nursing component of all their visits and thus pay the nurses on a per-visit basis.
All other staff are employees of the organization with a set salary, and they do not anticipate needing to hire any additional staff.
For transportation expenses, they pay the staff to use their own cars on a per-mile basis; however, they have an insurance policy that covers all employees while driving their cars during work, regardless of how many miles they drive and regardless of how many employees are driving.
Lab supplies are contracted out to an outside vendor, and they pay the outside vendor an agreed-upon rate for each test they order for a patient.
a. Are the CEO, CFO, COO, director, and assistant director salaries fixed or variable?
b. Nurses’ salaries? (fixed or variable)
c. Psychologists’ salaries? (fixed or variable)
d. Social worker’ salaries? (fixed or variable)
e. Transportation reimbursement (automobile mileage)? (fixed or variable)
f. Automobile insurance? (fixed or variable)
g. Lab supplies? (fixed or variable)
h. Medical supplies? (fixed or variable)
i. Rent? (fixed or variable)
j. Postage and stationary? (fixed or variable)
k. Depreciation? (fixed or variable)
5. What is the breakeven number of visits for this agency? Select one and show your work.
a. 37,734
b. 35,854
c. 42,000
d. 38,886
6. What is the contractual rate for the agency? Select one and show your work.
a. 83.4%
b. 16.6%
c. $194
d. 38.6%
7. Read the Pacific Park School case attached. Using the budgeted results and actual results for the Pacific Park School, what is the selling price variance? Select one and show your work.
a. $81,000
b. $2,250
c. $250
d. $33,750
8. Using the Pacific Park School case, what is the contribution margin variance? Assume all staff are actually salaried and their volume does not change with an increase or decrease in the number of child weeks. Select one and show your work.
a. $-900
b. $-141,375
c. $–7,250
d. $–7,750
9. You are the practice manager of a primary care practice. You budgeted for your practice to see 7,200 patients in a year, but you actually saw only 5,400. You budgeted that your physicians would spend 15 minutes with each patient and be able to see 4 patients per hour, but they were actually spending 20 minutes with each patient and thus saw only 3 patients per hour that year. You pay your physicians $120 per hour. What is your labor efficiency variance? Select one and show your work.
a. $–810,000
b. $–54,000
c. $–5,184
d. $–3,240,000
10. You are the laboratory manager, and your department has purchased a new centrifuge that your accounting department tells you must be depreciated over 9 years. The total acquisition cost for the centrifuge was $49,500. What is the depreciation expense per year? Select one and show your work.
e. $27,500
f. $4,950
g. $9,900
h. $5,500
11. Now assume a new type of centrifuge was purchased after 5 years that does the same work. What is the salvage value of the existing centrifuge? Select one and show your work.
a. $24,750
b. $27,500
c. $22,000
d. $39,600
12. What is an RVU? How can it be used in healthcare?
13. Explain the difference between a fixed budget and a flexible budget. Identify a few of the pros and cons of each type.
14. Provide 3 different reasons why US Healthcare Expenditures continues to rise year by year.
15. Name one stakeholder (other than hospitals and payers), that interacts with the pharmaceutical industry and explain how they may influence the pricing of a drug.