Question

Does flexible budget variance analysis explain the cause of variances observed? Why is the pertinent to a nurse manager?

Answer 1

A flexible budget is one where the actual results are monitored against the expected one. When there is a difference between the actual results and the expected one the question of variances in the results are observed. A flexible budget helps the overall budget in adjusting the forecasted revenues and expenses associated, and hence it can be said that the variances of the budget are explained.

A nurse manager is one who appoints the nurses, looks after their work in handling the patients and at the same time lends their support to the doctors in looking after the patient with utmost care. Patient care and looking after the families of the patients are one of the biggest responsibilities of the nurse manager. A flexible budget variance is extremely necessary for nurse managers as it allows checking the costs and the revenues associated in terms of per patient per bed and the salaries of nurses and doctors that are associated with the nursing homes and hospitals. Running a hospital is not that easy as revenue generation here is different unlike other industries and hence flexible budget variance is extremely helpful in maintaining the cost part of the industry at a large.