Analyze the variances in the following scenario: You are the nursing administrat
Analyze the variances in the following scenario:
You are the
nursing administrator for a medical group that expects a severe
outbreak of the flu this winter. You hire additional staff to treat
the patients and administer shots. Your special project budget was
for 1,000 hours of part-time nurses’ services at $40 per hour, for
a total cost of $40,000. It was expected that these nurses would
administer 400 flu shots and treat 1,600 flu patients. The medical
group typically charges $50 for a flu shot and $80 for treating a
flu patient. Actually, the group had 1,200 patients who received
the flu shot and 1,400 who had the flu and received treatment. On
average, it was able to collect $55 per flu shot and $70 per flu
patient. Compute the volume, mix, and price revenue variances. How
did things turn out for the group considering just revenues? How
did they turn out from a profit perspective? Use either the
approach from chapter 8 or from Appendix 8-A to solve. Clearly
label the calculations of the required variances using Excel. Use
formulas to calculate the three variances and format the cells to
insert a comma if there is more than three numbers and round to the
nearest whole number.
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