Reference no: EM132203943
The administrator of Appomattox Nursing Home is very aware of needing to keep his cost down since he just negotiated a new arrangement with a large insurance company that will pay him a fixed amount per patient day. Listed below are budgeted and actual expenses for the previous month.
Actual patient days were 30,000 compared to budgeted patient days of 24,000.
Budgeted Costs @ 24,000 Patient Days
Budgeted Cost Per Unit
Actual Costs @ 30,000 Patient Days
Pharmacy Costs Variable
Budgeted Costs @ 24,000 Patient Days - $100,000
Budgeted Cost Per Unit - $4.167
Actual Costs @ 30,000 Patient Days - $140,000
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Misc Supplies Costs Variable
Budgeted Costs @ 24,000 Patient Days - $56,000
Budgeted Cost Per Unit - $2.333
Actual Costs @ 30,000 Patient Days - $67,500
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Fixed Overhead Cost
Budgeted Costs @ 24,000 Patient Days - $708,000.
Budgeted Cost Per Unit - $29.50
Actual Costs @ 30,000 Patient Days - $780,000.
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Total
Budgeted Costs @ 24,000 Patient Days - $864,000
Budgeted Cost Per Unit - $36.00
Actual Costs @ 30,000 Patient Days - $987,500.
The Question: Determine the total variance associated with the planned and actual expenses