$6\mathrm{.}44$ Payroll variance

Competency VI$\mathrm{.}5$ &$/5$ B$/58/5$

The volume of outpatient surgery and heart$-$center procedures has increased at your organization.

Due to vacations and holidays, there is a significant coding backlog. As coding manager, you find

it necessary to contract with an outside vendor to reduce the backlog. The contractor's services

will be retained for four weeks, and payment will be at the rate of $$3\mathrm{.}50$ per chart. The projected

volume for the period is $365$ charts per week.

At the conclusion of the vendor's service you receive the following invoice.

Week $1$: $377$ charts coded

Week $2$: $363$ charts coded

Week $3$: $358$ charts coded

Week $4$: $372$ charts coded

Total: $1,470$ charts coded at $$3\mathrm{.}50$ per chart $=$$$5,145\mathrm{.}00$

Interpret the information you have and determine if a budget variance exists. If there is$,$ what type

of variance is it$?$ Explain your answer.

Resource

Revoir, R$.2020.$ Financial Management. Chapter $25$ in Health Information Management: Concepts,

Principles, and Practice, $6$th ed$.$ P$.$ Oachs and A$.$ Watters, eds. Chicago: AHIMA.