The Orthopedic unit treats bone diseases and injuries, including fractures and associated bone ligament and tendon damage. The Orthopedic unit currently has 40 hospital beds available for patients who are being treated for both medical and surgical conditions. Patients are admitted either directly from the Emergency unit or from home as elective orthopedic patients. The two most common orthopedic procedures include: knee replacements and hip replacements. The accounting department at CityCare Centre Hospital is responsible for comparing the actual volumes and hospital costs against the budget. You were recently hired to join the accounting department and have been asked to help the Director of Orthopedics (a senior surgeon) with the Orthopedic unit's budget analysis. The Director of Orthopedics shared with you that patient demand for orthopedic procedures has been continually high due to the aging population, and there are long waiting lists for surgeries. You have been provided with the most recent year's Orthopedic unit budget and the actual results for performance comparisons associated with their two main types of procedures: hip replacements and knee replacements. Above-average financial performance means the hospital can treat more than the budgeted patient volume, which would be seen as a benefit to society, but only if quality of care is not compromised. The data for the Orthopedic unit (see separate Excel file) shows that overall budgeted income for the Orthopedic unit was $278,000. While the actual income was much lower than anticipated, actual patient volumes were higher than anticipated. This finding is incredibly alarming to Director of Orthopedics, and you have been asked to investigate the causes of the income The expected total patient volume for both hip and knee surgeries across all major hospital providers in the region was 38,000 for the year. The actual total patient volume for the combined hip and knee surgeries across all major hospital service providers in the region was 46,000 patients. This market data will allow you to compare CityCare Centre Hospital's Orthopedic unit performance with other hospital service providers in the government funded region. Budgeted Government Funding Hip replacement parts per surgery Knee replacement parts per surgery Budgeted Labour Average pay per hour Average number of hours per hip surgery Average number of hours per knee surgery Budgeted Materials Hip replacement parts per patient Knee replacement parts per patient Budgeted Number of Patients Hip Replacement Knee replacement Budgeted Fixed Costs Administration Other Funds Received Hip Surgeries Knee Surgeries Total Funds Received DATA FOR CITYCARE CENTRE HOSPITAL'S ORTHOPEDIC UNIT FOR 2023 $8,000.00 $7,000.00 Actual Government Funding Hip replacement parts per surgery Knee replacement parts per surgery Doctors Nurses $ 480.00 $ 100.00 3.5 2.5 3.00 2.00 $5,000.00 $4,000.00 2,000 2,200 $4,240,000 $1,042,000 CITYCARE CENTRE HOSPITAL ORTHOPEDIC UNIT UNIT BUDGET AND RESULTS FOR YEAR ENDED 2023 Budget $16,000,000.00 $15,400,000.00 $31,400,000.00 Actual Results $19,351,800.00 $16,732,500.00 $36,084,300.00 Variable Costs (hips) Direct Labour - Doctors Direct Labour - Nurses $3,360,000.00 $600,000.00 Direct Materials $10,000,000.00 $4,558,837.50 $766,008.75 $13,025,250.00 Variable Costs (knees) Direct Labour - Doctors Direct Labour - Nurses Direct Materials Total Variable Costs $25,840,000.00 $2,640,000.00 $440,000.00 $8,800,000.00 $2,792,387.50 $460,750.00 $9,093,750.00 $30,696,983.75 Contibution Margin $5,560,000.00 $5,387,316.25 Fixed Costs Administration Other $4,240,000.00 $4,661,000.00 $1,042,000.00 $1,042,000.00 Total Fixed Costs $5,282,000.00 $5,703,000.00 Net Operating Income $278,000.00 -$315,683.75 Actual Labour Results Average pay per hour Average number of hours per hip surgery Average number of hours per knee surgery Actual Materials Hip replacement parts per patient Knee replacement parts per patient Actual Number of Patients Hip Replacement Knee replacement Actual Fixed Costs Administration Other $7,800.00 $6,900.00 Doctors Nurses $ 490.00 $ 95.00 3.75 3.25 2.35 2.00 $5,250.00 $3,750.00 2,481 2,425 $4,661,000 $1,042,000