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Merry Meadows provides non-acute inpatient care. They have 2 departments: Short term care for patients transitioning from an inpatient hospital stay and long-term skilled nursing

Merry Meadows provides non-acute inpatient care. They have 2 departments: Short term care for patients transitioning from an inpatient hospital stay and long-term skilled nursing for patients who need full time help with activities in daily living and managing their health needs.

Fixed costs for Merry Meadows include $10,000 per month Mortgage payment. There is an administrator, who earns $75,000 per year. Short term care has 3 nurses who earn $60,000 per year each and 6 nursing aides who earn $40,000 per year each. Long term care has 2 nurses who earn $60,000 per year each and 10 nursing aides who earn $40,000 per year each.

Merry Meadows contracts for maintenance @ $3000 per month for the entire facility. Utilities are $1000 per month.

Variable costs include food/dietary services.

Short term care

Long term care

Estimated patient days for 2021

5500 patient days

9125

Reimbursement

$350 per patient day

$300 per patient day

Food/Dietary

$25 per patient day

$25 per patient day

What was the 2021 Cost Variance?

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