Review the attached budget report that includes current month, YTD, the annualized YTD projections, and the prior year actuals to use for trending purposes. Use the 2021 worksheet/tab to build a budget for 2021 based on the assumptions listed below. Include the 2020 & 2019 YTD Actual as well. Assumptions: 1) The # of stays or procedures will increase by 5% for both Inpatient days and Outpatient procedures 2) The revenue per stay or procedure will decrease by 1% 3) Both the labor & the supply costs will increase by 2% | 4) What is the break even point for both inpatient and outpatient for the projected annualized 2020? For 2021?
Review the attached budget report that includes current month, YTD, the annualized YTD projections, and the prior year actuals to use for trending purposes. Use the 2021 worksheet/tab to build a budget for 2021 based on the assumptions listed below. Include the 2020 & 2019 YTD Actual as well. Assumptions: 1) The # of stays or procedures will increase by 5% for both Inpatient days and Outpatient procedures 2) The revenue per stay or procedure will decrease by 1% 3) Both the labor & the supply costs will increase by 2% | 4) What is the break even point for both inpatient and outpatient for the projected annualized 2020? For 2021?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Revenue
2021
2020
2019
Inpatient stays
Inpatient Revenue
Revenue per stay
Outpatient Procedures
Outpatient Revenue
Revenue per procedure
Total Revenue
Operating Expenses
Inpatient Labor (fixed costs)
Inpatient Supplies (variable costs)
Total Inpatient Expenses
Outpatient Labor (fixed costs)
Outpatient Supplies (variable costs)
Total Outpatient Expenses
Total Operating Expenses
Net Revenue
Review the attached budget report that includes current month, YTD, the annualized YTD projections, and the prior year actuals to use for trending purposes.
Use the 2021 worksheet/tab to build a budget for 2021 based on the assumptions listed below. Include the 2020 & 2019 YTD Actual as well.
Assumptions:
|1) The # of stays or procedures will increase by 5% for both Inpatient days and Outpatient procedures
2) The revenue per stay or procedure will decrease by 1%
3) Both the labor & the supply costs will increase by 2%
4) What is the break even point for both inpatient and outpatient for the projected annualized 2020? For 2021?
Transcribed Image Text:2020 Annualized Projection
2019 Budget to Actual
Budget
Current Month
Jun20 Year To Date
2019 Inpatient Break Even
Actual
Budget
Variance
% Variance
Actual
Budget
Variance
% Variance
Actual
Budget
Variance
% Variance
Actual
Variance
% Variance
VC/stay
$163.79
Revenue
Price
FC
Inpatient stays
Inpatient Revenue
31,320
21.8% $16,443,000 $14,250,000
2,820
$2,193,000
16.0%
2,400
$1,635,000
2,500
15,000
16.0%
$525
34,800
21.8% $18,270,000 $15,000,000
2,900
400
17,400
30,000
4,800
$3,270,000
16.0%
28,500
9.9%
14,580,000
$1,522,500
$1,250,000
$272,500
21.8%
$9,135,000
$7,500,000
15.4%
$361.21
40,365
Outpatient Procedures
Outpatient Revenue
1,250
1,000
250
25.0%
7,500
6,000
1,500
25.0%
15,000
12,000
3,000
25.0%
13,500
11,400
2,100
18.4%
$293,750
$250,000
$43,750
17.5%
$1,762,500
$1,500,000
$262,500
17.5%
$3,525,000
$3,000,000
$525,000
17.5%
$3,172,500
$2,850,000
$322,500
11.3%
Total Revenue
$1,816,250
$1,500,000
$316,250
21.1% $10,897,500
$9,000,000
$1,897,500
21.1% $21,795,000 $18,000,000
$3,795,000
21.1%
$19,615,500 $17,100,000
$2,515,500
14.7%
Operating Expenses
Inpatient Labor (fixed costs)
Inpatient Supplies (variable costs)
Total Inpatient Expenses
$1,225,000
$500,000
$1,725,000
$125,000
-$25,000
$100,000
$7,350,000
$750,000
10.2% $16,200,000 $14,700,000
-5.0%
10.2% $14,580,000 $13,965,000
$5,130,000
5.8% $19,710,000 $19,665,000
$1,350,000
$8,100,000
$1,500,000
$615,000
-$570,000
$45,000
10.2%
4.4%
2019 Outpatient Break Even
-$150,000
$600,000
-$300,000
$1,200,000
$475,000
-5.0%
$2,850,000
$3,000,000
$5,700,000
$6,000,000
-5.0%
$5,700,000
-10.0%
Price
FC
VC/stay
$1,825,000
5.8% $10,950,000 $10,350,000
5.8% $21,900,000 $20,700,000
0.2%
$235
1,485,000
$44.00
-$12,500
-$75,000
$30,000
-$45,000
-$150,000
$60,000
-$90.000
$1,485,000
Outpatient Labor (fixed costs)
Outpatient Supplies (variable costs)
$137,500
$55,000
-$225,000
$24,000
-$201,000
$150.000
$825,000
$900,000
$1,650,000
$1,800,000
$600,000
$2,400,000
-8.3%
-8.3%
-8.3%
$1,710,000
-13.2%
$191.00
7,775
$50,000
$330,000
$1,155,000
$300,000
$1,200,000
$660,000
$2,310,000
$570,000
$2,280,000
10.0%
$5,000
-$7,500
$594,000
$2,079,000
10.0%
10.0%
4.2%
Total Outpatient Expenses
$192,500
$200,000
-3.8%
-3.8%
-3.8%
-8.8%
Total Operating Expenses
$2,017,500
$1,925,000
$92,500
4.8%
$12,105,000 $11,550,000
$555,000
4.8% $24,210,000 $23,100,000
$1,110,000
4.8% $21,789,000 $21,945,000
-$156,000
-0.7%
Net Income/(Loss)
-$201,250
-$425,000
$223,750
-52.6%
-$1,207,500
-$2,550,000
$1,342,500
-52.6%
-$2,415,000
-$5,100,000
$2,685,000
-52.6% -$2,173,500 -$4,845,000
$2,671,500
-55.1%
Review the attached budget report that includes current month, YTD, the annualized YTD projections, and the prior year actuals to use for trending purposes.
Use the 2021 worksheet/tab to build a budget for 2021 based on the assumptions listed below. Include the 2020 & 2019 YTD Actual as well.
Assumptions:
1) The # of stays or procedures will increase by 5% for both Inpatient days and Outpatient procedures
2) The revenue per stay or procedure will decrease by 1%
3) Both the labor & the supply costs will increase by 2%
4) What is the break even point for both inpatient and outpatient for the projected annualized 2020? For 2021?
Expert Solution
Step 1
An income statement is a financial statement that represents the financial performance of the company. The Expenses incurred and Income earned during a particular period is depicted and the value of Net Income earned, or Net Loss incurred for the period is computed.
Break-even sales are the dollar amount of revenue at which a business earns a profit of zero i.e. No Profit No Loss. This sale amount exactly covers the underlying fixed costs of a business, plus all the variable costs associated with the sales.
The Break-even point is break-even quantity in units, where the business earns no profit no loss.
The formula to compute break-even point:
Break-even Sale in Units = Fixed Cost ÷ Contribution Margin per unit
Break-even Sales = Fixed Cost ÷ Contribution Margin Ratio
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