Budgeting Case Study: Variance Analysis for Surgical Volume and Patient Days

Assignment- Week 9
Budgeting
Case Study
1.0 (a) Determine the total variance between the planned and actual budgets for
Surgical Volume. Is the variance favorable or unfavorable??
The total variance computed on the basis of planned and actual budget is Dollar 1,99,648.
The variance has been computed taking gift shop revenue, surgery revenue and parking
revenue. The variance under each of the heads are favourable and has tolled at Dollar
480, dollar 1,98,288 and dollar 880. Further, the positive variance indicate revenue is
excess of estimated amount.
(b) Determine the total variance between the planned and actual budgets for Patient
Days. Is the variance favorable or unfavorable??
The Variance has been computed on the basis of actual and budget data. The patient days
have decreased in the actual data. Further, the following expenses have been taken into
consideration for computation of variance:
 Pharmacy Expense;
 Miscellaneous Supply;
 Fixed Overhead Costs.
The variance computed were unfavourable and tolled at dollar 33,107 (unfavourable) for
pharmacy expense , dollar 1,49,643 (unfavourable), dollar 1,08,l714 (unfavourable). On
the basis of above, total variance for patient days tolled at dollar 2,91,464 adverse.
C) Determine the service-related variance for Surgical Volume.
For computation of service related variance, the following variances have been deducted
from total variances:
 Gift Shop Revenue Variance;
 Parking Revenue Variance.
Total variance [I] $1,99,648
Gift shop revenue variance [F] $480
Parking revenue variance [H] 880
Service-related variance [J-K-L] 1,98,288
The service related variance computed is favourable.
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