Calculating your proforma and budget for the asc

Question

Assignment:

Q: You have completed calculating your Proforma and Budget for the ASC for 2017-2020. Now it is one year later, and the 2018 Statement of Operations is provided for you. The 2018 actual results and 2018 Budget are provided. You are expected to explain the variances. You will notice that the volumes are the same, yet revenue and adjustments are different. Given what you now know about budgeting, explain.

AMBULATORY SURGERY CENTER
Statement of Operations
Fiscal Year ended December 31, 2018
Revenues	2018 Actual	2018 Budget	Variance        2018-2020	Variance %
Gross Patient Services Revenue	$    13,894,746	$    13,988,832	$          (94,086)	-1%
Contractual Adjustment	7,879,621	7,910,846	$          (31,225)	0%
Charity Care Adjustment	625,264	629,497	$            (4,233)	-1%
Bad Debt Adjustment	277,895	279,777	$            (1,882)	-1%
NET PATIENT REVENUE	$      5,111,966	$      5,168,712	$          (56,746)	-1%
Other Revenue	-	-	-
TOTAL OPERATING REVENUES	$      5,111,966	$      5,168,712	$          (56,746)	-1%
Expenses
Clinical Salaries Expense	$          608,988	$          608,988	$                     -	0%
Clinical Benefits Expense	91,348	91,348	$                     -	0%
Admin Salaries Expense	228,660	228,660	$                     -	0%
Admin Benefits Expense	34,299	34,299	$                     -	0%
Allocated Overhead Salaries And Benefits Expense	250,000	250,000	$                     -	0%
TOTAL PERSONNEL EXPENSE	$      1,213,295	$      1,213,295	$                       0	0%
Drugs & Supply Expense	1,558,905	1,549,491	$              9,414	1%
General & Administrative Expense	200,000	200,000	$                     -	0%
Facilities & Equipment Expense	300,000	300,000	$                     -	0%
Depreciation Expense	812,143	812,143	$                     -	0%
Interest Expense	323,612	323,612	$                     -	0%
Allocated Overhead Other Expenses	40,000	40,000	$                     -	0%
TOTAL OPERATING EXPENSES	$      4,447,955	$      4,438,540	$              9,415	0%
TOTAL OPERATING INCOME	$          664,011	$          730,172	$          (66,161)	-9%
Non Operating Income	-	-	-	0%
EXCESS OF REVENUES OVER EXPENSES	$          664,011	$          730,172	$          (66,161)	-9%
Operational Analysis
# Surgical Cases Per year	3775	3775	0.0	0%
# of Ors needed per year	2.5	2.5	0.0	0%
# FTEs per year	14.8	14.8	0.0	0%
Ratio Analysis:
Operating margin % (Total Operating Income / Total Operating Revenue)	13%	14%	10%	71%