Investigating my First Variable Variance Report:
Beginning the Road to Precision in Variable Planning
Oh, bemusing variance report! However will I explain to Bob Schuler, Hahnemann Hospitals’ vice president, the ineffectiveness of my plan, how my supplies came in under budget and salaries were overextended during my first thirty days in the department?! I had hoped the variance percentages would be consistent with the unexpected revenue created by the increased patient volumes we experienced last month - but that could only explain the salary end of things because supplies and procedures didn’t increase. Furthermore, since patient volumes increased, it would make sense that more supplies would be used and more staff would be on-site, prepared for higher volumes - just as the busy times of the hospital were predicted in prior flexible budgets and analyses. (But supplies were reported as lower than expected which doesn’t match up) If I know Mr. Schuler, he is going to be very angry about quality control if I cannot figure out why my supplies were less than estimated and even more livid if we were detrimentally overstaffed; my job may even be in jeopardy! Calm down! Breathe. As I type, I am beginning to believe these variances are not my fault at all. But, I had never imagined switching from the fixed to variable expense department would include such a string of headaches. I must rise to this challenge and pull out every stop in my detection-correction plan while investigating these variances. Although, primarily, either the input prices varied from output prices or input supply-quantities were higher while supply-use remained lower; either my staffing-salaries were high because my estimates were faulty and not prepared for the high volumes or we were overstaffed but I just need to figure out which is true. Ultimately, I plan on using decision-theory to evaluate