| Course | HS440 Finance for Health Care |
|---|---|
| Unit | Unit 6 |
| Paper type | Variance report |
| Length | About 590 words, 5 pages double-spaced |
| Format | APA 7 student paper |
| School | Purdue University Global |
| Program | BS in Health Science |
| Updated | October 2026 |
Free sample paper for HS440 Unit 6
Missing Cases and a Thinner Payment: A Unit 6 Variance Report on a Composite Endoscopy Center's First Quarter
[Student Name]
Purdue University Global
HS440: Finance for Health Care
Unit 6 Variance Report
[Instructor Name]
[Date]
The center, its budget and its quarterly results are composite; the finance texts cited are real.
The Three Columns
Revenue appears three ways. The original budget, taken as a fourth of the year's plan: 1,440 cases at an average of 744.91 dollars, or 1,072,670. The flexible budget, the original rates applied to the actual 1,376 cases: 1,025,016. Actual results: 1,376 cases at an average of 719.75 dollars, or 990,376.
Splitting the Revenue Shortfall
Volume variance: flexible budget minus original budget, 1,025,016 minus 1,072,670, or 47,654 dollars unfavorable. Sixty-four fewer cases at the budgeted average payment, the part of the gap explained by volume alone (Zelman et al., 2014).
Price variance: actual minus flexible budget, 990,376 minus 1,025,016, or 34,640 dollars unfavorable. The same cases paid less on average than planned.
Total: 82,294 dollars unfavorable.
The volume shortfall came from one physician's unplanned two-week absence and from cancellations after poor bowel preparation, which the center tracks separately. The price shortfall came from mix: commercial cases were 30 percent of the quarter against 33 percent budgeted, Medicare 40 against 39, Medicaid 23 against 22 and self-pay 7 against 6.
More than two fifths of the shortfall was not about how many patients came but about who they were, and no amount of filling slots would have recovered it.
Supply Spending
Budgeted supply cost: 172 dollars per case, one kit per case. Flexible budget at actual cases: 1,376 times 172, or 236,672. Actual: 1,459 kits at 176 dollars, or 256,784. Total supply variance: 20,112 dollars unfavorable.
Price variance: 4 dollars more per kit times 1,459 kits, or 5,836 unfavorable. The distributor added a fuel surcharge in February.
Usage variance: 83 more kits than one per case, times the budgeted 172, or 14,276 unfavorable. Kits were opened for procedures that were then stopped for poor preparation and repeated, about 1.06 kits per case.
The usage variance is the larger and the more controllable. Better preparation instructions would cut both canceled slots and wasted kits. Each canceled slot costs twice: the contribution the case would have brought and the kit already opened for it, which is why this one problem shows up in both the revenue and the supply sections of the report.
Why Staffing Was Not Flexed
Room staffing is budgeted at 2,100 dollars per room-day. It does not change with cases inside a room-day; a room with ten patients costs the same to staff as one with twelve. Flexing it by cases would create a false favorable variance in a slow quarter and hide the fact that the center paid for slots it did not fill. Staffing is therefore compared with the original budget by room-days, the unit in which it actually varies, 125 planned and 125 used, with no variance (Finkler et al., 2019).
What the Report Recommends
1. Revise the annual forecast for mix: if commercial cases stay near 30 percent, lower payment per case alone would cost close to 140,000 dollars over the year.
2. Introduce a nurse call two days before each procedure to confirm preparation, aimed at the cancellations behind both the volume and usage variances.
3. Ask purchasing to dispute the fuel surcharge under the distributor contract.
Variance analysis is useful only when each variance points to someone who can act on it (Pink & Song, 2020).
References
Finkler, S. A., Calabrese, T. D., & Smith, D. L. (2019). Financial management for public, health, and not-for-profit organizations (6th ed.). CQ Press.
Pink, G. H., & Song, P. H. (2020). Gapenski's healthcare finance: An introduction to accounting and financial management (7th ed.). Health Administration Press.
Zelman, W. N., McCue, M. J., Glick, N. D., & Thomas, M. S. (2014). Financial management of health care organizations: An introduction to fundamental tools, concepts, and applications (4th ed.). Jossey-Bass.
The Purdue Global HS440 Unit 6 instructions
Unit 6 usually asks for a variance report comparing budgeted and actual results for a period, using a flexible budget to separate volume effects from price or efficiency effects. A few pages is typical. Marks reward correct original, flexible and actual figures, variances split and labeled favorable or unfavorable, explanations tied to operational causes and recommendations that follow from each variance. Many sections reward recognizing which costs should not be flexed by volume. Write each formula once in plain words and support the method with a finance textbook, and keep explanations specific, such as a named surcharge or a cancellation pattern.
How this HS440 Unit 6 example is built
The report lays out revenue in three columns: original quarterly budget, flexible budget at actual cases and actual results. It splits the revenue gap into volume and price variances, then explains each, the volume shortfall by an absence and cancellations, the price shortfall by mix; the highlighted sentence notes how much of the gap volume could never fix. The supply section repeats the method for kits, splitting price from usage and tracing usage to canceled procedures. A section explains why room staffing is compared by room-days rather than flexed by cases. Three numbered recommendations close the report, one aimed at each variance, with a reminder that every variance needs an owner.
Where the points sit in the HS440 Unit 6 rubric
Variance reports tend to be graded on correct calculation, correct splitting of variances, quality of explanation and usefulness of recommendations. Correct splitting usually carries the most weight, since separating volume from price or usage is the skill the unit tests. Calculation credit covers each column and variance with the right sign. Explanation earns points when causes are specific and supported. Recommendations are rewarded when each targets a named variance and an owner. Recognizing that a fixed or step-fixed cost should not be flexed by volume shows deeper understanding and often separates top reports from the rest. Reports that show the arithmetic for one variance in full, then summarize the rest, are easy to follow and to grade.
HS440 Unit 6 help: mistakes that cost points
The most frequent error is comparing actual results with the original budget only, which mixes volume and price effects together. Another is flexing every line, including staffing, so a slow quarter shows false savings. Some students label revenue variances with the expense rule and get the signs backward. Others explain variances with general phrases like market conditions. Recommendations that do not match a specific variance are hard to act on. If your quarter's data come from another department, share the budget and actual figures, and the variances can be split and explained line by line. A report that never says who should act on each variance stops short of being useful.
Get an HS440 Unit 6 example written to your instructions
Budget and actual figures from your Unit 6 case, with case counts, payer shares and supply quantities wherever the case provides them, allow the report to split volume from price and use; the grading criteria belong in the request as well. It comes back within 24-48h with every variance labeled and explained. First custom samples come free. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.
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HS440 Unit 6 questions, answered
Why isn't the staffing line recalculated at actual volume?
Because room staffing is set by the room-day, not by the patient. Two teams cost the same whether a room sees ten cases or twelve, so a recalculated figure would invent a saving that never happened. The sample reports staffing as a spending variance against its fixed budget and explains the overtime behind it in one sentence.
Is a lower payment per case a price variance if the center does not set prices?
It is still called one, but the explanation matters. Here payment per case fell because the payer mix shifted, not because any contract rate changed. The sample says so and could split the figure further into rate and mix pieces if the prompt asks, which tends to earn credit in sections that cover mix explicitly.
How are favorable and unfavorable labeled on revenue lines?
The expense rule flips. Revenue that beats budget is favorable and revenue that falls short is unfavorable, so both revenue variances in this quarter carry a U. A single note under the table states the convention, which prevents the mislabeling graders most often mark here, where a shortfall sometimes appears as favorable because the subtraction ran budget minus actual.
Where can I find a free HS440 Unit 6 sample paper?
The complete Unit 6 variance report is available on this page, splitting a quarter's revenue and supply variances at a composite endoscopy center.
What is a flexible budget?
The original budget recalculated at the actual volume, so differences from actual results show price and efficiency effects separately from volume.