| Course | HC 306 Healthcare Finance |
|---|---|
| Unit | Unit 7 |
| Paper type | Departmental budget worksheet |
| Length | About 960 words, 6 pages |
| Format | APA 7 student paper |
| School | Herzing University |
| Program | BS in Healthcare Administration |
| Updated | October 2026 |
Free sample paper for HC 306 Unit 7
A $163,210 Swing From Budget: A Departmental Budget Worksheet for Bayside Family Medicine's 2025 Year, With the Three Largest Gaps Explained
Student Name
Health Care Administration, Herzing University
HC 306: Healthcare Finance
Instructor Name
February 26, 2026
A $163,210 Swing From Budget: A Departmental Budget Worksheet for Bayside Family Medicine's 2025 Year, With the Three Largest Gaps Explained
Volume Assumption
The 2025 budget for Bayside Family Medicine, the composite four-physician Florida clinic, assumed 14,000 visits at an average net payment of $157 per visit, and 18,000 laboratory tests at an average of $12.10. Every variable line below depends on those assumptions. Actual volume was 13,300 visits, 5% below budget, and 17,300 tests. The largest single cause was one physician's unplanned six-week medical leave in the spring.
The Worksheet
Budget on the left, actual in the middle, variance on the right. Each variance is marked favorable (F) when it helps the bottom line and unfavorable (U) when it hurts it.
| Line | Budget | Actual | Variance |
|---|---|---|---|
| Visit revenue | $2,198,000 | $2,104,060 | $93,940 U |
| Laboratory revenue | $217,800 | $209,330 | $8,470 U |
| Total revenue | $2,415,800 | $2,313,390 | $102,410 U |
| Physician salaries and benefits | $1,120,000 | $1,120,000 | $0 |
| Clinical and front office staff salaries and benefits | $624,000 | $671,500 | $47,500 U |
| Medical supplies and vaccines | $91,000 | $104,300 | $13,300 U |
| Laboratory reagents and supplies | $43,200 | $41,900 | $1,300 F |
| Purchased services: billing service and reference laboratory | $118,000 | $109,600 | $8,400 F |
| Rent | $180,000 | $180,000 | $0 |
| Equipment leases | $30,000 | $30,000 | $0 |
| Electronic record and IT subscriptions | $54,000 | $57,200 | $3,200 U |
| Malpractice insurance | $72,000 | $72,000 | $0 |
| Utilities | $26,000 | $27,900 | $1,900 U |
| Education, postage and office | $38,000 | $42,600 | $4,600 U |
| Total expenses | $2,396,200 | $2,457,000 | $60,800 U |
| Net result | $19,600 | −$143,610 | $163,210 U |
Separating Volume From Performance
A static budget compares actual results with a plan built for 14,000 visits, so some of every variance is simply the result of doing less work. Flexing the budget to the volume that actually occurred separates the two. At 13,300 visits and the budgeted $157 per visit, visit revenue would have been $2,088,100. Actual revenue of $2,104,060 is $15,960 above that figure, a favorable price variance, while the difference between $2,198,000 and $2,088,100, $109,900, is the unfavorable volume variance. The clinic did not lose revenue because payers paid less; it lost revenue because it saw fewer patients.
The same logic applies to the variable expense lines. Laboratory reagents budgeted at $2.40 per test would have been $41,520 at 17,300 tests, almost exactly the $41,900 spent. Medical supplies, by contrast, would have been $86,450 at the actual visit volume, and spending was $104,300, so that line shows a real overrun rather than a volume effect. Fixed lines, such as rent, leases, malpractice and physician salaries, do not flex, and all of them came in on budget.
Gap 1: Visit Revenue, $93,940 Unfavorable
What happened: 700 fewer visits than budgeted, almost all during the physician's six-week leave, when the other three physicians could absorb only part of the schedule. The average payment per visit was slightly higher than budgeted, $158.20 against $157, because the missing visits skewed toward shorter, lower-paid visits. Volume explains about $109,900 of the gap (700 × $157), partly offset by the better average payment.
Controllable? Partly. The leave was not controllable; the lack of coverage was. The clinic had no arrangement for a locum physician or a part-time nurse practitioner to cover an absence.
Action: budget in 2026 for an on-call locum agreement at a fixed retainer, and track visits per physician weekly so a shortfall is visible within a month.
Gap 2: Staff Salaries and Benefits, $47,500 Unfavorable
What happened: two medical assistant positions were vacant for about seven months combined. The clinic covered them with agency staff at about $38 an hour, compared with about $21 an hour plus benefits for employed assistants, and with overtime for the remaining staff. The vacancies saved regular salary but cost more in agency fees and overtime than they saved.
Controllable? Yes, mostly. Both vacancies were posted at the budgeted wage of $21 an hour, which matched the statewide median for medical assistants in May 2025 (U.S. Bureau of Labor Statistics [BLS], 2026) but sat below the $23 to $24 that practices in the clinic's area were offering; the second position took four months to fill.
Action: raise the medical assistant starting wage to the local market level before posting, and budget for a small float pool of trained part-time assistants.
Gap 3: Medical Supplies and Vaccines, $13,300 Unfavorable
What happened: supply costs rose even though volume fell. Flexing the budget to actual volume makes the gap clearer. The budget assumed $6.50 of supplies per visit, so at 13,300 visits the flexible budget would be $86,450, and actual spending of $104,300 is $17,850 over that figure. Most of the difference came from vaccine purchases: the clinic added respiratory vaccines for older adults during the fall season, at prices higher than the budget assumed, and stocked more doses than it gave.
Controllable? Yes. Vaccine ordering was done in one large preseason purchase without a usage forecast.
Action: order vaccines in two or three tranches based on actual administration, and add a separate vaccine line to the 2026 budget so its cost and reimbursement can be tracked together. The practice of flexing the budget to actual volume, so that variable lines are judged against the volume that actually occurred, follows the course text (Pink & Song, 2020) and standard cost accounting practice (Datar & Rajan, 2021).
Smaller Lines
The favorable purchased services variance is not good news: the billing service charges a percentage of collections, so lower revenue automatically lowered its fee. Laboratory supplies were slightly favorable because test volume was slightly lower. The information systems increase reflects a new patient messaging module added mid-year, which was approved but not budgeted. Together, these smaller lines account for less than $20,000 of the swing and need no action beyond budgeting the messaging module for 2026.
Carrying the Lessons Into the 2026 Budget
Three changes follow for next year's budget. The volume assumption will be built physician by physician, with a stated allowance for absences, rather than as a single clinic total, so that one absence does not undo the whole plan. The medical assistant wage line will use the local market rate, and a separate line will budget for agency cover at a realistic number of hours, so that vacancies no longer appear as savings followed by larger overruns. And vaccines will have their own line, with a volume forecast by month, so that purchases and administrations can be matched. The worksheet will be reviewed monthly by the practice manager and quarterly by the physician owners, with any line more than 5% and $5,000 off budget explained in writing.
References
Datar, S. M., & Rajan, M. V. (2021). Horngren's cost accounting: A managerial emphasis (17th ed.). Pearson.
Pink, G. H., & Song, P. H. (2020). Gapenski's fundamentals of healthcare finance (3rd ed.). Health Administration Press.
U.S. Bureau of Labor Statistics. (2026). Occupational employment and wage statistics: May 2025 estimates, medical assistants (31-9092), Florida. https://www.bls.gov/oes/
HC 306 Unit 7 instructions, in plain terms
Unit 7 asks you to analyze a departmental budget against actual results. Expect to state the volume assumptions, present a worksheet with budget, actual and variance, flex the budget to actual volume, explain the largest gaps and carry lessons into next year's budget. Students often ask why flexing matters. A static budget built for one volume blames managers for variances caused simply by doing less or more work, so flexing separates volume effects from price and efficiency. Mark each variance favorable or unfavorable. For each large gap, say what happened, how much came from volume and how much from rate, and whether it will recur. Note favorable variances that are not good news.
Inside the HC 306 Unit 7 example
The worksheet opens with the visit, payment and test assumptions behind the budget. A table lists revenue and expense lines with budget, actual and variance. The flexing section recalculates expected revenue and variable costs at actual volume. The first gap section traces lost visits to one physician's leave and notes that payment per visit held steady. The second gap section compares agency rates with the cost of employed medical assistants over seven vacant months. The third gap section shows supplies rising per visit even as volume fell, pointing to vaccine price increases. The smaller lines section explains why the billing service's lower fee simply mirrored lower collections. The final section lists three changes to next year's budget.
HC 306 Unit 7 rubric: what full points look like
Herzing's rubric for a departmental budget worksheet usually covers assumptions, the worksheet, flexing, explanation of major variances and lessons for next year. Separating volume effects from rate and efficiency effects gets the closest reading, because it shows which variances managers could actually control. Assumption points reward stated volumes and rates. Worksheet criteria look for correct variances marked favorable or unfavorable. Flexing credit goes to recalculation at actual volume. Variance explanation points reward causes, amounts and whether they will recur. Lessons should change next year's budget method. Horngren's Cost Accounting by Datar and Rajan, the Pink and Song finance text and federal wage data for medical assistants support the worksheet.
Common HC 306 Unit 7 mistakes, and how to avoid them
Budget worksheets in HC 306 Unit 7 frequently go wrong by explaining variances without separating volume from performance. Another frequent problem is marking favorable and unfavorable incorrectly on expense lines. Students often explain only the bottom line. Causes are vague, such as costs went up. Favorable variances are assumed to be good news. One-time events are not separated from lasting problems. Next year's budget repeats the same assumptions. Agency staffing costs are not compared with employed staff, so the true price of a vacancy, nearly double the hourly cost, never reaches the people deciding how fast to hire. Finally, flex the budget before judging it, because graders reward a worksheet that shows managers which gaps they caused and which they did not.
Get a HC 306 Unit 7 example written to your instructions
Send the Unit 7 instructions and the rubric from your HC 306 classroom, plus the department and any figures your section supplied. We write a custom example with the volume assumption stated, lines ordered by size, variance labeled in words and the largest gaps explained by cause, back in 24 to 48 hours. The first custom sample is free.
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HC 306 Unit 7 questions, answered
Do I need real budget figures?
Illustrative ones are normal and usually safer, since internal budget documents are rarely yours to submit. Build a set that behaves realistically: salaries dominating the total, one supply line overspent, one line coming in under because volume fell short. Label the figures as illustrative inside the worksheet and keep every explanation tied to the numbers you actually put on the page.
How many variances should I explain?
Two or three, chosen by size and by whether anybody could act on them. A worksheet explaining every row reads as diligent and functions as noise, because the findings worth discussing end up buried among rounding differences. Say why you chose the ones you did, since that selection is itself a judgment a rubric can reward.
What makes a variance favorable?
Direction depends on which side of the budget the line sits. Spending less than planned on supplies is favorable; earning less than planned is not, even though both show as a shortfall. Label every row in words rather than leaving a sign for the reader, and watch the lines where lower spending is a warning rather than a win, such as agency staffing that fell because volume collapsed.
Where can I find a free HC 306 Unit 7 sample paper?
The full HC 306 Unit 7 departmental budget worksheet is free on this page, a clinic's 2025 budget against actual results with the budget flexed and three gaps explained. Budget worksheets for other units are available on request.
What is a flexible budget variance?
The difference between actual results and what the budget would have been at the volume that actually occurred, which separates volume effects from price and efficiency. This sample flexes a clinic budget.