Question

Managerial Accounting question.

Mercy Hospital staffs its medical/surgical floors with nurses depending on the number of patients assigned to the floor and the severity of their condition. The index used to capture nurse effort is termed a relative value unit, or RVU. For example, taking vital signs for a single patient may be equal to one RVU. RVU’s are then summed to estimate the total RVU requirements for the floor. From this, the nursing staff budget is determined.

The medical/surgical floor is scheduled to have 25 patients for each day of the coming seven-day week. Some patients will require more nursing effort than others, depending on the severity of their conditions or their ages. The following table summarizes the expected RVU requirements for the patients:

Number of Patients		RVUs per Day
5		20
8		25
10		30
2		40

A nurse earns $180 per day and is able to perform 40 RVUs per day.

a. Determine the total number of RVUs expected per day for the coming week.

Total number of RVUs expected per day =

b. Determine the total weekly nurse budget for the coming week.

Total weekly nurse budget = $

Answer 1

a
Number of Patients	RVUs per Day	Total
5	20	100
8	25	200
10	30	300
2	40	80
	Total	680
Total number of RVUs expected per day = 680
b
RVUs expected per day	680
X 7	7
RVUs expected per week	4760
Divide by RVUs per day per nurse	40
Nurse days required	119	=4760/40
X Pay per day	180
Total weekly nurse budget	21420