Essay on Variance Analysis

858 Words Nov 26th, 2013 4 Pages
Variance Analysis A manager of a variable hospital department has many responsibilities. The manager is accountable for budgeting and to protect profits. The financial manager is responsible for guarding overspending and generating profits. They are active in the budgeting process throughout the fiscal year. The budget department manager communicates with other managers, and accounting departments concerning budget issues, financing, and concerns in the organizations departments. Sometimes situations occur whereas payroll salaries are high and supplies are lower than planned and budgeted. The budget manager is responsible for providing feedback about finances, revenue, and any potential variances in the budgeted costs. This essay will be …show more content…
Managers need to be able understand them to report accurately. The managers first establish a budget but more importantly he or she must be able to distinguish differences between actual performances and the budget itself. A variance report is sometimes called monthly operating reports and departmental reports. Within the variance report are the results, the budget, budget variance, and percentage of variance. The report also shows the month and what happened to date. Inside the report will be the figures associated with the titles. Variable costs (for medication and supplies) are saved if a facility does not provide a service whereas fixed costs (for salaried labor, buildings, and equipment) are not saved over the short-term when a health care facility reduces service. The nursing department needed for patient care is considered to be an expense only item in the report (ncbi). A negative variance in the scenario mentioned earlier. Nurses and other staff members were asked to work long hours to cover the amount of patient care needed because of the asthma epidemic. As patients came to the facility the nursing staff scheduled increased, and more nurses to work longer hours and was reflected in current and the upcoming month’s budget. As patients healed they were dismissed from the facility leaving an excess number of the nursing staff scheduled to work. The problem that occurred is that there were not enough patients cared for

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