# Healthcare finance

Greenview Hospital operated at 120 percent of normal capacity in two of its departments during the year. It operated 120 percent times 20,000 normal capacity direct labor nursing hours in routine services and it operated 120 percent times 20,000 normal capacity equipment hours in the laboratory. The lab allocates overhead by measuring minutes and hours the equipment is used; thus equipment hours.AssumptionsFor Routine Services Nursing: â€¢ 20,000 hours Ã— 120% = 24,000 direct labor nursing hours. â€¢ Budgeted Overhead at 24,000 hours = \$42,000 fixed plus \$6,000 variable = \$48,000 total. â€¢ Actual Overhead at 24,000 hours = \$42,000 fixed plus \$7,000 variable = \$49,000 total. â€¢ Applied Overhead for 24,000 hours at \$2.35 @ = \$56,400.For Laboratory: â€¢ 20,000 hours Ã— 120% = 24,000 equipment hours. â€¢ Budgeted Overhead at 24,000 hours = \$59,600 fixed plus \$11,400 variable = \$71,000 total. â€¢ Actual Overhead at 24,000 hours = \$59,600 fixed plus \$11,600 variable = \$71,200 total. â€¢ Applied Overhead for 24,000 hours at \$3.455 @ = \$82,920.Required 1. Set up a worksheet for Applied Overhead Costs and Volume Variance with a column for Routine Services Nursing and a second column for Laboratory. 2. Set up a worksheet for Actual Overhead Costs and Budget Variance with a column for Routine Services Nursing and a second column for Laboratory. 3. Set up a worksheet for Volume Variance and Budget Variance totaling Net Variance with a column for Routine Services Nursing and a second column for Laboratory. 4. Insert input data from Assumptions. 5. Complete computations for all three worksheets.

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