The administrator of Appomattox Nursing Home is very aware of needing to keep his cost down since he just negotiated a new arrangement with a large insurance company that will pay him a fixed amount per patient day. Listed below are budgeted and actual expenses for the previous month.

Actual patient days were 30,000 compared to budgeted patient days of 24,000.

	Budgeted Costs @ 24,000 Patient Days	Budgeted Cost Per Unit	Actual Costs @ 30,000 Patient Days
Pharmacy Costs Variable	$100,000	$4.167	$140,000
Misc Supplies Costs Variable	$56,000	$2.333	$67,500
Fixed Overhead Costs	$708,000	$29.50	$780,000
Total	$864,0000	$36.00	$987,500

a. Determine the total variance associated with the planned and actual expenses.

b. Prepare a flexible budget of expense at 30,000 patient days.

c. Determine the Spending Variance which is defined as Actual costs less costs budgeted at actual volume.