HSM 340 Midterm

Use the following data to calculate the variances in problems 11-13.

The following information has been prepared for a home health agency:
                                                          Budget             Actual
            Wage Rate per Hour                          $16.00            $17.00
            Fixed Hours                                            320                 320
            Variable Hours per Relative
                  Value Unit (RVU)                             1.0                  1.1
            Relative Value Units (RVUs)              1,000              1,200
            Total Labor Hours                               1,320              1,640
            Labor Costs                                     $21,120          $27,880
            Cost per RVU                                    $21.12            $23.23
            
Budgeted costs at actual volume would be $25,344 ($21.12 × 1,200), and the total variance to be explained is $2,536 Unfavorable ($27,880 - $25,344). Be sure to specify whether the variance is favorable or unfavorable.

11.	What is the amount of variance that is attributed to the difference between the budgeted and actual wage rate per hour?

12.	What is the amount of variance that is attributed to the change in labor productivity?

13.	What is the amount of variance that can be attributed to the difference between budgeted and actual volume?

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