1. Management has studied work patterns in the housekeeping department and estim

Question

1. Management has studied work patterns in the housekeeping department and estimates the number of hours to be worked as follows. Hours worked = (1,500 hours per month) + (0.50 × RVUs). For the coming month, management expects RVUs to be 5,800. What should budgeted labor for the month be?

2, Last year the price for thermometer covers in a pediatrician’s office was $.05 each. This year, the covers cost $.06 each. If the office purchased 10,000 thermometer covers this year, what is the price variance?

Explanation / Answer

1. Budgeted labor for the month= 1500+ (0.5*5800)= 4400 hours.

2. Price variance= (0.6-0.5)* 10000= 1000 adverse.

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