Question

Here are the 2017 revenues for Nu-Kim Radiology for four different budgets:

Static Flexible Enrollment & Utilization Flexible Enrollment Actual Budget Budget Budget Results

$150,000 $140,000 $156,000 $162,000

Calculate the following:

a. Revenue Variance =

b. Volume Variance =

c. Price Variance =

d. Enrollment Variance =

e. Utilization Variance =

Answer 1

Revenue variance = Actual Revenues - Static Revenues

Revenue variance = $162000-$150000

Revenue variance​ = $12,000 (Favorable).

Volume variance = Flexible Revenues (enrollment and utilization) – Static Revenues

Volume variance = $140000– $150000

Volume variance =  -$10,000.(Unfavorable)

Price variance = Actual Revenues – Flexible Revenue

Price variancvariance = $162000-$140000

Price variance =​ $22,000. (Favorable)

Enrollment variance = Flexible Revenues (enrollment) – Static Revenues

Enrollment variance = $156000 – $150000

Enrollment variance = $6,000. (Favorable)

Utilization variance =Flexible revenues (enrollment and utilization) - Flexible revenues (enrollment)   

Utilization variance = $140000 – $156000

Utilization variance = -$16,000. (Unfavourable)

Thank you.