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Chelsea Clinic’s actual and budget information for 2020 is listed below, we will use this to...

Chelsea Clinic’s actual and budget information for 2020 is listed below, we will use this to calculate the flexible budget. Chelsea had actual visits of 100,000 patient visits.

Total FFS Visit Volume 100,000 visits

Budgeted FFS Visit Volume 90,000 visits

Budgeted Variable Costs Variable Budget - Volume :

Labor 48,000 total hours

Supplies 100,000 total units

Variable Budget - Prices:

Labor $ 25.00 per hour

Supplies $ 1.50 per unit

Actual Variable Costs Actuals - Volume:

Labor 50,000 total hours

Supplies 150,000 total units

Actuals - Prices

Labor $ 28.00 per hour

Supplies $ 1.50 per unit

When calculating the flexible budget, we will use the actual volume but the budget rates. Based on this information, calculate the flexible budget for total costs (include the fixed proportion). Choice: $1,000,000

Choice: $1,980,000

Choice: $2,000,000

Choice: $3,000,000

Solutions

Expert Solution

Total FFS Visit Volume 100,000 Actual hrs/units Budgeted rate Cost Option 1
(Fixed cost-$1000000)		 Option 2
(Fixed cost-
$1,980,000)		 Option 3
(Fixed cost-
$2,000,000)		 Option 4
(Fixed cost-
$3,000,000)
Variable Cost
Labour 50,000hrs 25 per hr          12,50,000
Supplies 150,000 total units 1.5 per unit             2,25,000
Total Variable cost          14,75,000 14,75,000          14,75,000        14,75,000         14,75,000
Fixed Cost 10,00,000          19,80,000        20,00,000         30,00,000
Total Cost 24,75,000          34,55,000        34,75,000         44,75,000

ekkarill92 answered 1 year ago
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