The emergency room at Worcester General Hospital uses a flexible budget based on patients seen as the measure of activity. The hospital must maintain an adequate staff of attending and? on-call physicians at all times so patient activity does not affect physician scheduling. Nurse scheduling varies as volume? changes, however. A standard of 0.7 nurse hours per patient visit was set. Hourly pay for nurses ranges from? $9 to? $18 per? hour, and the average pay rate is

$16 per hour. The hospital considers all materials to be? supplies, a part of? overhead; there are no direct materials. A statistical study showed that the cost of supplies and other variable overhead is more closely associated with? nurse-hours than with patient visits. The standard for supplies and other variable overhead is $9 per nurse hour. The head physician of the emergency room? unit, Brad Marr?, is responsible for control of costs. During October the emergency room unit treated

3,500 patients. The budget and actual costs were as? follows:

Data Table Patient visits Nurse hours Nursing cost Supplies and other variable overhead Fixed costs Total cost Budget 3,400 2,380 38,080 21,420 92,900 152,400 $ Actual 3,500 2,535 42,715 22,720 92,900 158,335 Variance 100 85