Question

Providence Hospital generates monthly performance reports for each of its departments. The hospital must maintain an adequate staff of attending and 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. Nurse-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 3,900 patients but actually treated 3,600 patients. The following additional information for October is available: Budget Actual Variance T 2,340 108 $51,480 Nurse-hours Nursing costs Supplies & other variable costs Fixed costs 2,232 $30,300 $29,200 $21,180 $9,800 $39,000 $94,600 $105,100 $-10,500 Required Compute the flexible-budget variances for each of the cost categories for October (NOTE: enter favorable variances as positive numbers and unfavorable variances as negative numbers): Nursing costs Supplies and other variable costs Fixed costs

Answer 1

	Flexible budget	Actual	Flexible budget variance
Nursing costs	49104	30300	18804 F
Supplies and other variable costs	36000	29200	6800 F
Fixed cost	94600	105100	-10500 U