Given the following information, explain the salary variance. Costs in the de- partment are considered 50...

 

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Given the following information, explain the salary variance. Costs in the de- partment are considered 50 percent variable. Salaries Paid Hours Volume Actual $228,800 20,800 19,000 Budget $237,120 19,760 20,000 Variance Analysis Table 15.b Salary and Hours Budget Adjustments (Sophisticated method) Salary Data Patient days Hours per patient day Total paid hours Hourly pay rate Nusring salaries $ $ Actual 10,000 4.5 45,000 9.50 $ 427,500 $ Budget Budget adjust amount b. For nursing hours Budget adjustment amou=32,000 hrs x 0.80 x 0.25 6,400 hrs a. For salary budget Budget adjustment amou= $320,000 x 0.80 x 0.25 64,000 $ 8,000 4 Variance analysis of nursing salaries (sophisticated method) Variance expense factor is 0.8 Volume change factor Analytical Tools for Managers 32,000 10.00 $ 320,000 $ Variance =(actual vol-budget vol)/budget vol (10,000 -8,000) / 8,000 0.25 = orig. budg amt x var exp fact x vol change fact (2,000) (0.5) (13,000) 0.50 (107,500) 12 Given the following information, explain the salary variance. Costs in the de- partment are considered 50 percent variable. Salaries Paid Hours Volume Actual $228,800 20,800 19,000 Budget $237,120 19,760 20,000 Variance Analysis Table 15.b Salary and Hours Budget Adjustments (Sophisticated method) Salary Data Patient days Hours per patient day Total paid hours Hourly pay rate Nusring salaries $ $ Actual 10,000 4.5 45,000 9.50 $ 427,500 $ Budget Budget adjust amount b. For nursing hours Budget adjustment amou=32,000 hrs x 0.80 x 0.25 6,400 hrs a. For salary budget Budget adjustment amou= $320,000 x 0.80 x 0.25 64,000 $ 8,000 4 Variance analysis of nursing salaries (sophisticated method) Variance expense factor is 0.8 Volume change factor Analytical Tools for Managers 32,000 10.00 $ 320,000 $ Variance =(actual vol-budget vol)/budget vol (10,000 -8,000) / 8,000 0.25 = orig. budg amt x var exp fact x vol change fact (2,000) (0.5) (13,000) 0.50 (107,500) 12

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Lets calculate the salary variance The actual salary is 228800 The budgeted salary is 237120 Salary ... View the full answer