Determine the efficiency, enrollment, and utilization variances for the month. 3 separate problems. Data give is:
Budgeted Actual
Enrollees 80,000 84,000
usage rate 0.25 0.3333
visits 20,000 28,000
costs 200,000 270,000
cost per visit 10.00 9.643
I've done the following:
Utilization variance =change in usage rates x actual number of enrollees x budgeted cost per unit
(0.3333-0.25) x 84,000 x $10.00
0.0833 x 84,000 x 10.00
$69,972
Efficiency Variance= change in cost per unit x actualunit
Efficiency Varience= (9.643-10.00) x 28,000
Efficiency Variance= -0.357 x 28,000
Efficiency Variance= -9,996
The efficiency variance for the month is $-9,996.00.
Enrollment Variance= Budgeted cost per unit x the change inenrollment x budgeted utilization
Enrollment Variance= $10.00 x (80,000- 84,000) x 0.25
Enrollment Variance= $10.00 x (-4,000) x 0.25
Enrollment Variance= -$209,800
The enrollment variance for the month is -$209,800
The problem says total variances are $70,000 but I'm not getting anything close to that. No clue what I'm doing.
Budgeted Actual
Enrollees 80,000 84,000
usage rate 0.25 0.3333
visits 20,000 28,000
costs 200,000 270,000
cost per visit 10.00 9.643
I've done the following:
Utilization variance =change in usage rates x actual number of enrollees x budgeted cost per unit
(0.3333-0.25) x 84,000 x $10.00
0.0833 x 84,000 x 10.00
$69,972
Efficiency Variance= change in cost per unit x actualunit
Efficiency Varience= (9.643-10.00) x 28,000
Efficiency Variance= -0.357 x 28,000
Efficiency Variance= -9,996
The efficiency variance for the month is $-9,996.00.
Enrollment Variance= Budgeted cost per unit x the change inenrollment x budgeted utilization
Enrollment Variance= $10.00 x (80,000- 84,000) x 0.25
Enrollment Variance= $10.00 x (-4,000) x 0.25
Enrollment Variance= -$209,800
The enrollment variance for the month is -$209,800
The problem says total variances are $70,000 but I'm not getting anything close to that. No clue what I'm doing.