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 shortfalls;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 calculationsanswering the questions included after the table.
|6 North – January 20XX|
|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|
|%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?
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