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 the approach from chapter 8 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.
Word document Explain the meaning of the variances in a two page Word document.
Excel- Clearly label the calculations of the required variances using Excel.
Please use references below
Finkler, S. A., Purtell, R.M., Calabrese, T.D., & Smith, D.L. (2013). Financial management for public, health, and not-for-profit organizations (4th ed.). Upper Saddle River, NJ: Pearson Prentice Hall. ISBN: 978-0-13-280566-7.
Bukovinsky, D., & Talbott, J. C. (2010). Variance Analysis Using Throughput Accounting. CPA Journal, 80(1), 28-35.
The sales volume variances should be of particular interest to management. Basic breakeven analysis illustrates the importance of volume on profitability, Bukovinsky, D., & Talbott, J. C. (2010).
Lev, B. (1969). An Information Theory Analysis of Budget Variances. The Accounting Review, (4). 704.
Variances areplotted on a control chart and only thosethat fall outside the control limits are regardedas significant, Lev. B. (1969)