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A dermatology clinic expects to contract with an HMO for an estimated 80,000 enrolees. The HMO expects 1 in 4 of its enrolled members to use the dermatology services for each month.

At the end of the year, the dermatology clinic’s business manager looked at her monthly figures and saw that the number of enrolled members had risen by 5% over the budgeted amount, and that 1 in 3 of the total HMO members had employed the dermatology services per month.

Actual and budgeted statistics are presented below. The total variance is $70,000 and is unfavourable:

1808_enrolls table.jpg

problem1. Find out the enrolment variance for month.

problem2. Find out the utilization variance for month.

problem3. Find out the efficiency variance for month.

Financial Accounting, Accounting

  • Category:- Financial Accounting
  • Reference No.:- M93496

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