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Integrative Exercise Cost System Choices, Budgeting, and Variance Analyses for Sacred Heart Hospital The Two Cost Systems Sacred Heart Hospital (SHH) faces skyrocketing nursing costs,
Integrative Exercise Cost System Choices, Budgeting, and Variance Analyses for Sacred Heart Hospital The Two Cost Systems Sacred Heart Hospital (SHH) faces skyrocketing nursing costs, all of which relate to its two biggest nursing service linesthe Emergency Room (ER) and the Operating Room (OR). SHH's current cost system assigns total nursing costs to the ER and OR based on the number of patients serviced by each line. Total hospital annual nursing costs for these two lines are expected to equal $300,000. The table below shows expected patient volume for both lines. Measure ER OR Total Number of patients (ER visits or OR surgeries) 1,000 Number of vital signs checks 2,000 10,000 1,000 4,000 5,000 2,000 6,000 15,000 Number of nursing hours Dequired. 7. For the OR service line, use the information above and the cost per OR nursing hour under the current cost system to calculate the a. flexible budget variance. (Hint: Use your answer to Requirement 3 as the standard cost per OR nursing hour for the current cost system.) Unfavorable b. price variance. Unfavorable C. efficiency variance. Unfavorable 8. For the OR service line, use the information above and the cost per OR nursing hour under the vital-signs costing system to calculate the a. flexible budget variance. (Hint: Use your answer to Requirement 6 as the standard cost per OR nursing hour for the vital signs cost system.) No variance b. price variance. Favorable c. efficiency variance. Unfavorable
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