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The Chief Nurse Executive of a hospital is interested in making a quick assessment about performance for the year. The nursing department budget for the year was $10 million and actual expenses were $14 million. However, department fixed costs were budgeted at $4 million. The hospital expected to have 1000 admissions. The hospital actually had 1300 admissions.
Problem a. What were the budgeted variable costs per patient?
Problem b. What is the flexible budget for 1,300 patients?
Problem c. How much over or under budget was the hospital, taking into account the volume of patients? Be sure to indicate "over" or "under" as well as giving the amount in your answer.
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