Question

In: Accounting

A local clinic created the following static budget table for the year 2015. Complete the table...

A local clinic created the following static budget table for the year 2015. Complete the table below by filling the blanks and creating a profit & loss statement under section IV

Section I-Volume Assumptions

A-FFS (fee for service) 50,000 vists

B-Capitated lives                                    30,000 members

Number of member-months ?

Expected utilization per member-month 0.25

Number of visits ?

Total Expected Visits ?

Section II- Revenue Assumptions

A-FFS                                                     $30/visit (30x50,000 expected visits)=$1,500,000

B-Capitated lives                                    $3 PMPM (3x 360,000 member-months)=$1,080,000

Total Expected Revenues ?

Section III-Cost Assumptions

A-Variable Costs:

Labor                                       (60,000 hrs at $25/hr)=$1,500,000

Supplies                                   (200,000 units at $1.5unit/hr)=$300,000

Total variable Cost $1,800,000

Variable cost per visit                         (1,800,000/140,000)=$12.8571429

B-Fixed Costs                                                     $500,000

C-Total expected costs                                       ?

Section IV-Profit & Loss statement-create

Solutions

Expert Solution

Section I-Volume Assumptions;

A. FFS (Fee for service)

50000 visits

B. Capitated lives

30000 members

Number of member-months

360000

Expected utilization per member-month

0.25

Number of visits (360000 * 0.25)

90000 visits

C. Total Expected Visits (50000 + 90000)

140000 visits

Section II- Revenue Assumptions;

A. FFS ($30 * 50000)

$1500000

B. Capitated lives ($3 * 360000)

$1080000

C. Total Expected Revenues ($1500000 + $1080000)

$2580000

Section III-Cost Assumptions;

A-Variable Costs:

Labor (60000 hours * $25)

$1500000

Supplies (200000 units * $1.5)

$300000

Total variable costs

$1800000

Variable cost per unit ($1800000 / 140000 visits)

$12.8571429

Fixed costs

$500000

C-Total expected costs ($1800000 + $500000)

$2300000

Section IV-Profit & Loss statement

Revenues;

FFS

$1500000

Capitated

$1080000

Total

$2580000

Costs;

Variable:

FFS ($1800000 * 50000 / 140000)

$642857.14

Capitated ($1800000 * 90000 / 140000)

$1157142.86

Total

($1800000)

Contribution margin

$780000

Fixed costs

($500000)

Projected profit

$280000


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