ACCA Applied Knowledge · Management Accounting · Cost reductions and value enhancement
A hospital ward treated 1,800 patients using 9,000 nursing hours in the previous year. This year it treated 2,100 patients using 9,450 nursing hours. By what percentage did the efficiency measure of patients treated per nursing hour change, to the nearest whole percent?
Efficiency rose by about 11%. Patients per nursing hour went from 0.20 (1,800/9,000) to 0.2222 (2,100/9,450). The ratio of 0.2222 to 0.20 is 1.111, an 11% increase. Using only the 17% rise in patients ignores the additional nursing hours.
- AIncrease of 11%Correct
- BIncrease of 17%
- CIncrease of 5%
- DIncrease of 22%
Explanation
Last year: 1,800/9,000 = 0.20 patients per hour. This year: 2,100/9,450 = 0.2222. Change = 0.2222/0.20 - 1 = 11.1%, so 11%. The 17% option uses only the rise in patients (2,100/1,800) and ignores the extra hours.
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