Factors to Consider in Writing a Variance Report Order Instructions: You are the manager of a variable hospital department and you just received your monthly budget results that state your salaries were higher and your supplies were lower than budgeted.
Write a paper (1,000-1,200 words) that explains what factors you should consider when writing your variance report to your vice president. Your vice president expects her managers to write detailed variance reports that include all possibilities.
Include the relationships between variance reporting, interpreting variance report results, and actual results of performance
No plagiarism
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Less Than Satisfactory
65.00%
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Satisfactory
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80.0 %Content
65.0 % Essay on Budget Variance, Focusing on Relationships Between Variance Reporting, Interpreting Variance Report Results, and Actual Results of Performance
Does not demonstrate an understanding of the business concepts involved in the issue, including the implications. Does not address the variance relationships specified in the assignment. Does not demonstrate critical thinking and analysis of the situation, and does not develop effective answers to the questions, with rationale.
Demonstrates only minimal understanding of the business concepts involved in the issue. Only minimally addresses the variance relationships specified in the assignment. Demonstrates only minimal abilities for critical thinking and analysis of the case study, and develops weak answers to the questions, with minimal rationale
Demonstrates knowledge of the business concepts involved in the issue, but has some slight misunderstanding of the implications. Satisfactorily addresses the variance relationships specified in the assignment. Provides a basic idea of critical thinking and analysis for the questions, answers, and rationale. Does not include examples or descriptions.
Demonstrates acceptable knowledge of the business concepts involved in the issue. Satisfactorily develops the variance relationships specified in the assignment. Develops an acceptable response and rationale for it. Utilizes some examples.
Demonstrates thorough knowledge of the business concepts involved in the issue, and their implications. Thoroughly develops the variance relationships specified in the assignment. Clearly answers the questions and develops a very strong rationale. Introduces appropriate examples.
15.0 % Integrates Information From Outside Resources Into the Body of Paper
Does not use references, examples, or explanations.
Provides some supporting examples, but minimal explanations and no published references.
Supports main points with examples and explanations.
Supports main points with explanations and examples. Application and description is direct, competent, and appropriate of the criteria.
Supports main points with references, examples, and full explanations of how they apply.
17.0 %Organization and Effectiveness
6.0 % Thesis Development and Purpose
Paper lacks any discernible overall purpose or organizing claim.
Thesis and/or main claim are insufficiently developed and/or vague; purpose is not clear.
Thesis and/or main claim are apparent and appropriate to purpose.
Thesis and/or main claim are clear and forecast the development of the paper. It is descriptive and reflective of the arguments and appropriate to the purpose.
Thesis and/or main claim are comprehensive; contained within the thesis is the essence of the paper. Thesis statement makes the purpose of the paper clear.
6.0 % Paragraph Development and Transitions
Paragraphs and transitions consistently lack unity and coherence. No apparent connections between paragraphs are established. Transitions are inappropriate to purpose and scope. Organization is disjointed.
Some paragraphs and transitions may lack logical progression of ideas, unity, coherence, and/or cohesiveness. Some degree of organization is evident.
Paragraphs are generally competent, but ideas may show some inconsistency in organization and/or in their relationships to each other.
A logical progression of ideas between paragraphs is apparent. Paragraphs exhibit a unity, coherence, and cohesiveness. Topic sentences and concluding remarks are appropriate to purpose.
There is a sophisticated construction of paragraphs and transitions. Ideas progress and relate to each other. Paragraph and transition construction guide the reader. Paragraph structure is seamless.
5.0 % Mechanics of Writing (Includes spelling, punctuation, grammar, language use.)
Surface errors are pervasive enough that they impede communication of meaning. Inappropriate word choice and/or sentence construction are used.
Frequent and repetitive mechanical errors distract the reader. Inconsistencies in language choice (register), sentence structure, and/or word choice are present.
Some mechanical errors or typos are present, but are not overly distracting to the reader. Correct sentence structure and audience-appropriate language are used.
Prose is largely free of mechanical errors, although a few may be present. A variety of sentence structures and effective figures of speech are used.
Writer is clearly in command of standard, written, academic English.
3.0 %Format
3.0 % Paper Format (1- inch margins; 12-point-font; double-spaced; Times New Roman, Arial, or Courier)
GCU template is not used appropriately or documentation format is rarely followed correctly.
GCU template is used, but some elements are missing or mistaken; lack of control with formatting is apparent.
GCU template is used, and formatting is correct, although some minor errors may be present.
GCU template is fully used; There are virtually no errors in formatting style.
All format elements are correct.
100 % Total Weightage
SAMPLE ANSWERR
Variance Analysis
Factors to Consider in Writing a Variance Report Introduction
This paper intends to analyze factors that should be considered in writing a report on variance. Notably, a report on variance aims at explaining to business executives how the company is performing through comparison of figures (Devaraj & Patel, 2016). Therefore, a report on variance should be detailed in order to present all available possibilities. For instance, the variance may result from differences in activities carried out, prices of supplies used or the level of efficiency of supplies (Drummond & Vowler, 2012). As a manager in a department of a variable hospital, many responsibilities are involved.
For instance, it is the duty of the manager to budget and protect profits. Therefore, the manager is expected to cooperate with other managers within the hospital. Among the other managers, is the finance manager, whose role is to guard overspending, and ensure making of increased profits. Therefore, a finance manager is always involved in budgeting (Drummond & Vowler, 2012). Additionally, information about financing, departmental concerns, and budget issues is communicated to all managers within the organization.
Occasionally, a situation may occur where the payroll for salaries is higher compared to supplies, yet the planned budget was the vice versa. In such a scenario, it is the duty of a budget manager, to provide feedback, on finances, incomes, and possible variations of budgeted costs. This paper relies upon a scenario where, salaries were higher, while supplies were lower than initially stated. Therefore, this paper explores the existing scenario variances and illustrates the relationship in reporting of variance, explanation of results from reports of variance and consequences of performance in a hospital.
The scenario above about variance in salaries and the hospital supplies results from the occurrence of an outbreak of Cholera. In a period of just four months, many Cholera patients have been hospitalized. Consequently, the hospital thought it necessary to approve overtime. Overtime is aimed at attending to necessities of the growing patient numbers (Devaraj & Patel, 2016). Notably, working overtime attracts an additional salary for the health workers involved. Moreover, more supplies are required to be used in treatment services. The situation results in variance from the budget.
Relationship that exists between Reporting of Variance, Interpretation of Results from Reporting of Variance and the Consequences of Performance
In reporting of variance, unit factors and price factors are separated. Therefore, reporting of variance analyzes, the prices incurred to purchase supplies, the time taken by health workers at work, the cost of direct labor by health workers per hour, and the variance between fixed costs and variable overhead costs. Theoretically, when the variance is positive, then it shows the hospital has spent less money than it had budgeted. However, if the variance is negative, then it shows the hospital has spent more money than it had budgeted.
For instance, in June the hospital allocated a fixed cost of $20 200 in its budget. It incurred a variable overhead cost of $1000 while prices for supplies were $9,600. In addition, the total cost incurred from the cost of direct labor by health workers per hour was $ 9,000. This shows the hospital had a positive variance of $600. Therefore, the hospital spent less than it had budgeted. In relation to hospital supplies, a significant difference can be realized, from the variation in unit volumes of hospital supplies purchased, or difference in the average prices of the hospital supplies (Devaraj & Patel, 2016).
For instance, in July the hospital spent $580 in the purchase of 20 cartons of syringes, at $29 per carton of syringes. In August, however, the hospital demanded a supply of 29 cartons of syringes. There was an additional supply of 9 cartons of syringes hence the supplier lowered the price per carton to $20. Therefore, the hospital incurred a cost of $580 for 29 cartons of syringes, which initially would have cost the hospital $841 (Drummond & Vowler, 2012).
From the various changes witnessed over the period, the financial reports have some variances. After the hospital was faced with an influx of cholera patients, the need for equipment to attend to the patients went up. Consequently, suppliers of hospital equipment saw the need to reduce the cost they charge for their supplies, in addition to giving discounts for their supplies. The move by suppliers was due to the frequent and huge demand from the hospital for equipment.
This implies that the books of accounts show a variance in the price of direct materials. However, the variance is favorable to the hospital. Therefore, this implies that the hospital incurred less cost for purchasing the direct materials than the normal standard cost (Ness, 2013). The actual result from the change is an effect on hospital inventories and the efficiency of attending to the many Cholera patients, hospitalized in the hospital. Moreover, standard cost for supplies goes down.
Furthermore, the influx of Cholera patients to the hospital, called for urgent attention, in order to treat Cholera patients, educate the public, and reduce the spread of Cholera epidemic. Therefore, in the books of accounts, the hospital experienced a variance in the recording of usage of direct materials. Notably, for the hospital, direct materials also refer to health attendants. During the epidemic, the influx of patients made the hospital understaffed. Therefore, it was necessary to introduce and approve overtime for the available health workers.
As a way of encouraging health workers to work overtime, it was necessary to introduce an additional salary for health workers who worked past their normal working hours (Ness, 2013). Therefore, in the case of health workers, usage of direct materials for the hospital was unfavorable. The hospital ended up spending more money than it does in its normal budget limits to pay health workers for the hours they spent working. The actual result from the change in offering additional payment to workers is adequacy of health workers, to enhance efficiency in the provision of treatment services, to the many Cholera patients.
Factors to Consider in Writing a Variance Report Conclusion
The paper above has analyzed factors to be considered when writing a report on variance. The case on hand is monthly budget results of a department of a variable hospital, being higher for salaries and lower for supplies than normal budget allocations. A number of factors have been addressed by the paper to analyze the cause for the variance. Among the factors analyzed are the time which is taken by health workers at work, the cost of direct labor by health workers per hour, and the prices incurred to purchase supplies.
Factors to Consider in Writing a Variance Report References
Devaraj, S. & Patel, P. (2016). Attributing Responsibility. Journal For Healthcare Quality, 38(1), 52-61. http://dx.doi.org/10.1097/jhq.0000000000000008
Drummond, G. & Vowler, S. (2012). Analysis of variance: variably complex. British Journal Of Pharmacology, 166(3), 801-805. http://dx.doi.org/10.1111/j.1476-5381.2012.01893.x
Ness, D. (2013). Healthcare: Serving the Patient. Healthcare, 1(3-4), 58. http://dx.doi.org/10.1016/j.hjdsi.2013.07.009
