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Q. 1. Assume that you are the nursing administrator for a medical group that expects a severe outbreak of flu this winter. You hire additional staff to treat 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 of $40,000. It was expected that these nurses would treat 2,000 patients. After the flu season was over, it turned out that the total spent on part-time nurses was $50,000. The nurses worked 1,200 hours and 2,600 patients were treated. Calculate the variances. Was the overall result favorable or unfavorable?
Q. 2. Using the information from problem 8-29, assume that the nursing administrator expected 400 patients for flu shots and 1,600 for flu treatment. 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 flu shots 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?
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