"determine the following variances from arcadia hospitals 2005 budget and determine if the variance positive or negative net patient revenue,wages,medical surgical supplies, utilities,maintenance, net income
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Determine the revenue variance from Arcadia Hospital’s 2005 budget.
can u please help me start this off i'm confused?
To determine the variances for each category and determine if they are positive or negative, you will need the actual amounts and the budgeted amounts for Arcadia Hospitals in 2005.
Here's the step-by-step process to calculate and determine the variances:
1. Obtain the actual and budgeted amounts for each category:
- Net Patient Revenue: Actual Revenue - Budgeted Revenue
- Wages: Actual Wages - Budgeted Wages
- Medical Surgical Supplies: Actual Supplies Expense - Budgeted Supplies Expense
- Utilities: Actual Utility Expenses - Budgeted Utility Expenses
- Maintenance: Actual Maintenance Expenses - Budgeted Maintenance Expenses
- Net Income: Actual Net Income - Budgeted Net Income
2. Calculate each variance:
- If the actual amount is larger than the budgeted amount, the variance is positive (Favorable).
- If the actual amount is smaller than the budgeted amount, the variance is negative (Unfavorable).
3. Interpret the variances:
- If the variance for Net Patient Revenue is positive, it means that the hospital generated more revenue than expected.
- If the variance for Wages is positive, it signifies that the hospital spent more on wages than budgeted.
- If the variance for Medical Surgical Supplies is positive, it indicates that the hospital spent more on supplies than budgeted.
- If the variance for Utilities is positive, it suggests that the hospital spent more on utilities than budgeted.
- If the variance for Maintenance is positive, it implies that the hospital spent more on maintenance than budgeted.
- If the variance for Net Income is positive, it means that the hospital's actual net income is higher than the budgeted net income.
Conversely:
- If the variances for any of the categories are negative, it indicates that the actual amounts are lower than the budgeted amounts.
Please note that without the actual and budgeted amounts, it's not possible to provide specific calculations or accurately determine whether the variances are positive or negative for Arcadia Hospitals in 2005.