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 3,500 patients but actually treated 3,600 patients. The following additional information for October is available:

	Budget	Actual	Variance
Nurse-hours	1,400	1,512	-112
Nursing cost	$32,200	$34,300	$-2,100
Supplies & other variable costs	$35,000	$28,200	$6,800
Fixed costs	$101,400	$107,000	$-5,600

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:___________

Answer 1

hi, please find below the answer let me know if you need any clarificaion -

		Budget	Actual	Variance		Budgetdvarible cost per patient	Budgeted fixed cost
	Nurse-hours	1,400	1,512	-112
	Nursing cost	$32,200	$34,300	($2,100)		$          9.20
	Supplies & other variable costs	$35,000	$28,200	$6,800		$        10.00
	Fixed costs	$101,400	$107,000	($5,600)			$101,400
	Patients treated	3500	3600
	Computation of flexible budget and variance for 3600 patients
		flexible budget		Actual	Variance
		Working	Amt
	Nurse-hours	=36*1400/35	1,440	1,512	-72
	Nursing cost	9.2*3600	$33,120	$34,300	-1,180
	Supplies & other variable costs	10*3600	$36,000	$28,200	7,800
	Fixed costs	101400	$101,400	$107,000	-5,600
Answer
	Nursing costs variance =	-1,180	unfavorable
	Supplies and other variable costs variance =	7,800	favorable
	Fixed costs=	-5,600	unfavorable