Case study 4 -BUDGETING STATEMENTS Essay Example | Topics and Well Written Essays - 750 words

Case study 4 -BUDGETING STATEMENTS - Essay Example Hence for 4000 patients visited during the month, the number of hours expected to be spent by the nurses is (4000 * 0.5) 2000 hours. But the actual time spent by the nurses on the patients is 2080 hours. This indicates that an additional 80 hours, i.e, (80 * 12)  £ 960 was spent on the patients. It is essential to investigate the reasons for this variance as the effect of this variance is adverse. As this measure is directly related to the efficiency of the nurses working at the hospital, one of the reasons for this variance might be that some of the nurses might be inefficient (Drury, 2005). The other possible reason could be that, some of the patients might have required additional care and attention which could have resulted in additional hours spent by the nurses. Appropriate action can be taken to improve the efficiency of the nurses can control this variance to a great extent (Blocker, 1951). The cost incurred in terms of the payment made to the nurses amounts to  £ 33,180. However the estimated pay based on the average pay per hour ( £ 12) is computed as (2080 * 12)  £ 24,960. This additional  £ 8,220 also has an adverse effect on the budget. Hence it is essential to understand the reasons for this variance in order to adjust the budgeting accordingly for the future periods. It is known that the pay for the nurses vary from  £ 7 to  £ 28, whereas the average is  £ 12. In the budget prepared, this average was only taken into account. However, the reason for the variance might be that more number of nurses with payment more than  £ 12 were on duty during the month. This variance can be controlled by noting the nurses who will be on duty for the following month and estimating the pay based on their pay scales, instead of using the average pay value. The quantity of supplies and variable heads are associated with the nursing hours as per the statistical studies. According to the standard, an average of  £ 10 worth of supplies and variable overheads are