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A dermatology clinic expects to contract with an HMO for an estimated 80,000 enrollees. The...

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Accounting

A dermatology clinic expects to contract with an HMO for an estimated 80,000 enrollees. The HMO expects 1 in 4 of its enrolled members to use the dermatology services per month. At the end of the year, the dermatology clinics business manager looked at her monthly figures and saw that the number of enrolled members had increased by 5% over the budgeted amount, and that 1 in 3 of the total HMO members had used the dermatology services per month. Actual and budgeted statistics are presented below. The total variance is $70,000 and is unfavorable: Budgeted Actual Enrollees 80,000 84,000 Usage Rate 0.25 0.3333 Visits 20,000 28,000 Cost $200,000 $270,000 Cost Per Visit $10.00 $9.643 1. Determine the enrollment variance for the month. 2. Determine the utilization variance for the month. 3. Determine the efficiency variance for the month.

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