Revenue Group Revenue in the Discussion Chapter

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This holds true even when the price variance is calculated; the reduction in volume of the number of flu patients seeking treatment actually means that the reduction in revenue from these services impacted the medical group slightly less than it would have at the expected volume, and the slight increase in revenue-per-flu shot was compounded by the three-fold increase in expectations in the number of flu shots administered. For flu shots, this price variance was six thousand, and for the treatment of flu patients this variance comes in at fourteen thousand (technically, negative fourteen thousand, as the group would have made this much more had they been able to collect the full eighty dollars expected from every flu patient treated). These figures show that the price changes alone, had they not been accompanied by significant volume changes, would have led to a situation of reduced profitability when compared to expectations, as the reduction in the price for the flu patients is greater than the increase in price that the group achieved with flu shots.

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All in all, the hiring of the part-time nurses proved to be more profitable than had initially been expected, though the decrease in the medical group's revenue for the treatment of flu patients definitely impacted its profitability. The ultimate profitability of this endeavor cannot be gauged with the information provided, as mentioned above, as the other costs incurred during the administering of flu shots/treatment of flu patients are not listed. Assuming these costs are minimal, or at least that they do not exceed the cost of the nurses, this venture would appear to be highly profitable......

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