1.As the nurse manager of the new 15-bed observation unit you are responsible for reporting to your nursing director and the finance department any variances identified within your operating budget. Listed below is your monthly operating report. Please review and discuss the specific variances and how you will determine the causes of variances.

Actual

Budget

Variance

Volume/Census

360

420

60 U

Supplies

$8,550

$7,800

750 F

Nursing Labor

$58,450

$52,575

5875 F

2.As the nurse manager, you will now need to determine the staff mix based on budgeted full-time equivalents (FTEs). Consider the formula below:

Actual Price per FTE x Actual Total Number of FTEs = Budgeted Cost

Using the figure in the table above for nursing labor, calculate the Actual Cost and how you will divide the nursing labor expense based on skill mix. Consider safe staffing requirements, quality of care and operational needs to meet the demands of the new unit. Provide a detailed rationale of why and how you arrived at your decision.