Integrative Exercise Cost System Choices, Budgeting and Variance Analyses for Sacred Heart Hospital The Two Cost Systems Sacred Heart Hospital (Setaces skyrocking nursing costs, all of which relate to its two biggest nursing service Ines-the Emergency Room (ER) and the Operating Room (OR). SHE'S current cost system assigns total nursing costs to the ER and OR based on the number of patients serviced by eachine. Total hospital and nursing costs for these two lines are expected to equal $300,000. The table below shows expected patient volume for both ines Measure ER OR Total Number of patients (ER visitor OR surgeries) 1.000 1.000 2,000 Number of vital signs cheos 2,000 4,000 6,000 Number of nursing hours 10,000 5.000 15,000 Required: 1. Using the current cost system, calculate the hospital-wide rate based on number of patients per patient 2. Calculate the amount of nursing costs that the current cost system assigns to the ER and to the OR. The nursing cost, assigned to the ER The nursing cost, assigned to the OR 3. Using the results from Recurement 2 calculate the cost per or nursing hour under the current cost system per OR hour After discussion with several experienced nurses, Jack Bauer (SHH's accountant) decided that assigning nursing costs to the two service lines based on the number of times that nurses must check patients' vital signs might more dosely match the underlying use of costy hospital resources. Therefore, for comparative purposes, Jack decided to develop a second cost system that assigns total nursing costs to the ER and OR based on the number of times rurses check patients' vital signs. This system is Cher My 3. Using the results from Requirement 2, calculate the cost per OR nursing hour under the current cost system, per OR hour After discussion with several experienced nurses, Jack Bauer (Spots accountant) decided that assigning nursing costs to the two service lines based on the number of times that nurses must check patents vital signs might more dosely match the underlying use of cosy hospital resources. Therefore, for comparative purposes. Ik decided to develop a second cont system that assigns total norsing costs to the ER and OR based on the number of times uses check patients wil signs. This system is referred to as the vazi-signs costing system. The earlier table also shows data for vital signs checks for ines, 4. Using the vital-signs costing system, calculate the hospital-wide rate based on the number of vital gas checks. per vital signs check 5. Calculate the amount of nursing costs that the visions costing system assigns to the ER and to the OR. The vital signs cost, assigned to the ER The vital-signs cost, assigned to the OR 6. Using the results from Requirements, calculate the cost per or nursing hour under the vital siges conting som per OR hour Budgeting and Variance Analysis In an effort to better plan for and control or costs. Ska management asked Jack to calculate the fole budget variance (16, newbie budget coute - actual costs) for Or nursing costs, including the price variance and efficiency vacance. Cven that Jack is interested in comparing the reported costs of both systems, he decided to prove the requested OR variance analysis for both the current cost system and the taisns costing system. In addition, Jack those to use each cost site estimate of the cost per OR nursing hour as the standard cost per or nursing hour Jack collected the following additional information for use in preparing the flexible budget variance for both systems: Actual number of surgeries performed - 950 Standard number of nursing hours allowed for each OR surgery-5 Actual number of OR nursing hours used 5.000 Actual OR nursing costs $190,000 Actual number of surgeries performed - 950 Standard number of nursing hours allowed for each OR surgery - 5 Actual number of OR nursing hours used - 5,000 Actual OR nursing costs $190,000 Enter a favorable variance as a negative amount, and an unfavorable variance as a positive amount. If there is no variance, enter ** and select "no variance" from the dropdown 7. For the OR service in use the information above and the cost per or nursing hour under the current cont system to calculate the flexible budget vartanen. (Hint: Use your answer to Requirement as the standard cost per OR nursing hour for the current cost system Unfavorable D. 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 Discussion of Reported Costs and Variances from the Twe Systems 9. Consider SHH's need to contro its skyrocketing costs Jack's discussion with experienced nurses regarding their use of hosalta resources and the reported costs that