Tips for this assignment:
Note the first variance has been done for you!
- A favorable budget variance refers to positive variances or gains;
- an unfavorable budget variance describes negative variance, meaning losses and short falls and
- budget variances occur because forecasters are unable to predict the future with complete accuracy.
- Complete the table below.
- Think, what is the variance for each item (percentage and number)?
- Note; when you are completing this table, you will only need to fill in the pink section which will be the difference between the budget and actual.
- Note; some of these numbers will be negative. The first variance has been done for you.
- You must explain your calculations answering the questions included after the table.
| 6 North – January 20XX | |||
| Actual | Budget | Variance | |
| Patient Days | 925 | 974 | 49 (-5%) |
| Nursing Hours Per Patient Day | 8.2 | 7.5 | |
| Nursing Assistant Hours per Patient Day | 3.57 | 3.26 | |
| Salary and Benefits | $594,520 | $572,411 | |
| Supplies | $29,153 | $32,366 | |
| Other expenses | $47,157 | $47,737 | |
| %Overtime to FTEs | 3.23% | 2.65% | |
What does the information about salaries and supply expenses tell you?
Is Nurse Nugyet over or under budget on each of the items?
Are the variances explainable? Or, is Nurse Nugyet over budget with no justifications?
What additional information would be helpful when explaining variances?