An unfavorable rate variance has occurred in the salary budget of a unit. When investigating this variance, the nurse manager should look for which situations? Note: Credit will be given only if all correct choices and no incorrect choices are selected. Select all that apply.
A) Were any unexpected bonuses awarded?
B) Did agency personnel hours exceed the number predicted in the budget?
C) Were new employees hired at lower wages?
D) Did the number of client days exceed the predicted budgeted amount?
E) Were fewer nursing hours worked than were predicted?

Question

Quizplus · Accepted Answer

1. An expected bonus that was not budgeted could result in an unfavorable rate variance.
2. Agency personnel hours are higher than hospital employee hours. If the number of hours exceeded the budgeted amount, an unfavorable rate variance would occur.
3. If new employees are hired at work hours at a lower rate than that of other employees, a favorable rate variance would occur.
4. Client day variations result in volume variances, not rate variances.
5. Fewer nursing hours worked would result in an efficiency variance, not a rate variance.

An Unfavorable Rate Variance Has Occurred in the Salary Budget