Problem 12-42 Student Name:
Class:
MOUNT RANIER GENERAL HOSPITAL
Performance Report
August
Flexible Budget Actual Cost Variance
August YTD August YTD August F/U YTD F/U
Mount Ranier * * * * * * * *
General Hospital
General Medicine Division * * * * * * * *
Surgical Division * * * * * * * *
Medical Support Division * * * * * * * *
Administrative Division * * * * * * * *
Total cost * * * * * * * *
Medical Support Division
Nursing Department * * * * * * * *
Radiology and Lab Department * * * * * *
Nutrition Department * * * * * * * *
Housekeeping Department * * * * * * * *
Maintenance Department * * * * * * * *
Total cost * * * * * * * *
Nutrition Department
Registered Dieticians’ Section * * * *
Food Service Section * * * * * * * *
Kitchen * * * * * * * *
Total cost * * * * * * * *
Food Service Section
Patient Food Service * * * * * * * *
Cafeteria * * * * * * * *
Total cost * * * * * * * *
Cafeteria
Food servers’ wages * * * * * * * *
Paper products * * * * * * * *
Utilities * * * * * * * *
Maintenance * * * * * * * *
Custodial * * * * * *
Supplies * * * * * *
Total cost * * * * * * * *
3. Put yourself in the place of the hospital’s administrator. Which variances in the
performance reports would you want to investigate further? Why?
12-42 Solutions Student Name: Instructor
Class: McGraw-Hill/Irwin
1. and 2.
MOUNT RANIER GENERAL HOSPITAL
Performance Report
August
Flexible Budget Actual Cost Variance
August YTD August YTD August YTD
Mount Ranier 1,165,400$ 9,323,200$ 1,162,300$ 9,316,600$ 3,100$ F 6,600$ F
General Hospital
Medical Support Division
Nursing Department 140,000$ 1,120,000$ 150,000$ 1,160,000$ (10,000)$ U (40,000)$ U
Radiology and Lab Department 36,000 288,000 36,200 288,000 (200) U –
Nutrition Department 143,400 1,147,200 143,900 1,157,200 (500) U (10,000) U
Housekeeping Department 20,000 160,000 23,200 172,000 (3,200) U (12,000) U
Maintenance Department 26,000 208,000 12,000 154,000 14,000 F 54,000 F
Total cost 365,400$ 2,923,200$ 365,300$ 2,931,200$ 100$ F (8,000)$ U
Nutrition Department
Registered Dieticians’ Section 15,000$ 120,000$ 15,000$ 120,000$ –$ –$
Food Service Section 66,400 531,200 70,100 545,200 (3,700) U (14,000) U
Kitchen 62,000 496,000 58,800 492,000 3,200 F 4,000 F
Total cost 143,400$ 1,147,200$ 143,900$ 1,157,200$ (500)$ U (10,000)$ U
Food Service Section
Patient Food Service 34,000$ 272,000$ 37,000$ 274,000$ (3,000)$ U (2,000)$ U
Cafeteria 32,400 259,200 33,100 271,200 (700) U (12,000) U
Total cost 66,400$ 531,200$ 70,100$ 545,200$ (3,700)$ U (14,000)$ U
Cafeteria
Food servers’ wages 16,000$ 128,000$ 18,000$ 144,000$ (2,000)$ U (16,000)$ U
Paper products 9,000 72,000 8,800 72,400 200 F (400) U
Utilities 2,000 16,000 2,100 16,200 (100) U (200) U
Maintenance 800 6,400 200 2,200 600 F 4,200 F
Custodial 2,200 17,600 2,200 17,200 – 400 F
Supplies 2,400 19,200 1,800 19,200 600 F –
Total cost 32,400$ 259,200$ 33,100$ 271,200$ (700)$ U (12,000)$ U
3. Put yourself in the place of the hospital’s administrator. Which variances in the
performance reports would you want to investigate further? Why?
A variety of responses are reasonable for this question. Since the data given in the
problem do not include the individual variances over several months, it is not possible to
condition the investigation on trends. The largest variances in the performance report are
the most likely to warrant an investigation. The following variances for August would likely
catch the attention of the hospital administrator:
General Medicine Division 420,000$ 3,360,000$ 408,000$ 3,341,800$ 12,000$ F 18,200$ F
Surgical Division 280,000 2,240,000 282,000 2,231,600 (2,000) U 8,400 F
Medical Support Division 365,400 2,923,200 365,300 2,931,200 100 F (8,000) U
Administrative Division 100,000 800,000 107,000 812,000 (7,000) U (12,000) U
Total cost 1,165,400$ 9,323,200$ 1,162,300$ 9,316,600$ 3,100$ F 6,600$ F
