Running head: VARIANCE ANALYSIS
Grand Canyon University
This is a paper to explain the variance in the monthly budget for the hospital department. This will determine if the budget cause our department to run efficient and effective. While the variance analysis is the best way to measure performance the results in the monthly budget showed that salaries were higher and supplies came in lower. What variances allowed salaries to be higher while cost for supplies remained low? In order to do this we must determine the reason for variance in the department budget. The main factors to determine the change can be: input prices, productivity, or departmental volume (Cleverly 2011). First we must determine if the budget was knowing what the variance determine will allow the manger to know what action need to be taken t maintain budget. Let look at the higher salaries over the actual outcome. What the manager must do is identify the cause of the variance and can it occur repeatedly. How are the variances of higher salaries affecting the budget financially? What can be or needs to be done to fix the cause for the variance? The variance report will address if we have address the current trends to determine if we are overspending or under spending for our budget goals. During this time we must revisit the budget to determine if the budget goals are realistic to current trends. This should reveal if we have a serious issue or if minor adjustment need to be made for next month budget. The comparison of the rise in salaries while the supplies cost remained low. Since supplies were lower it made a positive variance for the budget, while salaries made a negative variance. Did the variance cause a break even for the explanation of higher salaried? The explanation of the higher salaries payout will need an explanation because it causes a negative variance. What needs to be determined...
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