Assume that you are the nursing administrator for a medical group that expects a severe outbreak of flu this winter. You hire additional staff to treat patients and administer shots. Your special project budget was for 1,000 hours of part-time nurses' services at $40 per hour, for a total cost of $40,000. It was expected that these nurses would treat 2,000 patients. After the flu season was over, it turned out that the total spent on part-time nurses was $50,000. The nurses worked 1,200 hours and 2,600 patients were treated. Calculate the variances. Was the overall result favorable or unfavorable?

Show your work and fill in the following Excel spreadsheet

The term rate may be substituted for "price" throughout this solution. Original Budget Flex Budget: Budgeted Volume x Budgeted Quantity Actual Volume x Budgeted Quantity x Budgeted Rate x Budgeted Rate X II II X =- SO SO SO Volume Variance Flex Budget VQA Budget: Actual Volume Actual Volume Budgeted Quantity x Budgeted Rate x Actual Quantity x Budgeted Rate x X =- SO SO SO F Quantity Variance VQA Budget: Actual: Actual Volume Actual Volume x Actual Quantity x Actual Quantity x Budgeted Rate x Actual Rate X - - X Price Variance SO SO SO U =