Providence Hospital generates monthly performance reports for each of its depart

Question

Providence Hospital generates monthly performance reports for each of its departments. The hospital must maintain an adequate staff of attending and on-call physicians at all times, so physician costs are not affected by the number of patient visits. But all other costs do vary with patient activity. Nurse-hours are used as the activity measure for nurse costs, and patient visits are used as the activity measure for the cost of supplies and other variable costs The head physician of the hospital's emergency room, Yolanda Mortensen, is responsible for control of costs. During October, the emergency room unit expected to treat 3,700 patients but actually treated 4,200 patients. The following additional information for October is available: Nurse-hours Nursing cost Supplies& other variable costs Fixed costs Budget 1,480 $34,040 $33,300 $94,600 Actual 1,764 $31,000 $28,200 $98,700 Variance 284 $3,040 $5,100 $-4,100 Required Compute the flexible-budget variances for each of the cost categories for October (NOTE: enter favorable variances as positive numbers and unfavorable variances as negative numbers) Nursing costs Supplies and other variable costs Fixed costs Submit Answer Tries 0r8

Explanation / Answer

Activity rate for:

Nursing cost; $34,040/1480=$23 per nursing hour

Supplies and other variable cost;$33,300/3700 =$9 per patient

Flexible budget variance:

$40,572

(1764×$23)

$37,800

(4200×$9)

Variance is favourable if actual expenses are less than flexible budget .

Actual budget flexible budget variance(actual budget - flexible budget) flexible budget Nursing cost $31,000 $9,572 F

$40,572

(1764×$23)

Supplies and other variable cost $28,200 $9,600 F

$37,800

(4200×$9)

Fixed costs $98,700 $4,100 U $94,600(same as given budget amount) Total $157,900 $15,072 F $172,972

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.