Providence Hospital generates monthly performance reports for each of its departments. The hospital must maintain an adequate staff of attending an 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. Nurs hours are used as the activity measure for nursing 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 4,000 patients. The following additional information for October is available: Budget Actual Variance Nurse-hours 2,100 2,320 -220 Nursing costs $46,200 $30,000 $16,200 Supplies & other variable costs $38,500 $25,500 $13,000 Fixed costs $104,200 $109,900 $-5,700 Required Compute the flexible-budget variances for each of the cost categories for October (NOTE: enter favorable variances as positive numbers and unfavora variances as negative numbers): Nursing costs Supplies and other variable costs Fixed costs
Providence Hospital generates monthly performance reports for each of its departments. The hospital must maintain an adequate staff of attending an 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. Nurs hours are used as the activity measure for nursing 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 4,000 patients. The following additional information for October is available: Budget Actual Variance Nurse-hours 2,100 2,320 -220 Nursing costs $46,200 $30,000 $16,200 Supplies & other variable costs $38,500 $25,500 $13,000 Fixed costs $104,200 $109,900 $-5,700 Required Compute the flexible-budget variances for each of the cost categories for October (NOTE: enter favorable variances as positive numbers and unfavora variances as negative numbers): Nursing costs Supplies and other variable costs Fixed costs
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter10: Standard Costing And Variance Analysis
Section: Chapter Questions
Problem 2MTC: The Two Cost Systems Sacred Heart Hospital (SHH) faces skyrocketing nursing costs, all of which...
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