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Homework answers / question archive / Discussion 4-2: Variance Analysis and Justification Reflection Reflect on your readings and identify two key points that provided clarity to assist in your understanding of variance analysis
Discussion 4-2: Variance Analysis and Justification
Reflection
Reflect on your readings and identify two key points that provided clarity to assist in your understanding of variance analysis.
Application
Review the variance reporting on pages 161-169 of your textbook.
Departmental and administrative leaders must routinely evaluate their monthly operating budgets for variances and develop action plans to correct areas of missed opportunity. Imagine you are the leader of this department's cost center. Utilizing your learning thus far in the module, prepare an explanation of the variance and your plan to correct or justify the overages noted. You may use one of two assumptions:
Budgeted volume for the cost center was at budget; therefore expenses were not controlled for salaries and supplies. Develop an action plan to align expenses to budget for the next reporting month.
Volumes exceeded budget by 20% (there were 20% more patients receiving care in the month). Analyze if this increase in patient volume offset the personnel cost and care supply costs for the unit.
Justify your rationale for your selection of scenario 1 or 2 in a 3-4 paragraph post on the discussion board. (Please do not use attachments).
