Financial Management and Budgeting Flashcards
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Read the first 7 Financial Management and Budgeting flashcards as text
A nurse manager notices supply costs are 15% over budget midway through the fiscal year. What is the FIRST action to take?
Answer: Analyze variances to identify the root cause
Variance analysis identifies whether the overage is due to volume, price, or efficiency issues before corrective action is taken.
Which budget type allocates resources based on expected patient volume and service demand for the upcoming period?
Answer: Flexible budget
A flexible budget adjusts planned expenditures based on actual or anticipated volume of activity.
When calculating the cost per patient day, which of the following is the correct formula?
Answer: Total expenses divided by patient days
Cost per patient day is determined by dividing total unit expenses by the total number of patient days in the period.
A hospital is comparing the long-term financial benefit of purchasing new infusion pumps versus continuing to rent them. This decision requires a:
Answer: Break-even analysis
Break-even analysis determines the point at which the cost of purchasing equals the cumulative cost of renting, guiding the capital investment decision.
Indirect costs in a nursing unit budget are BEST described as costs that:
Answer: Support operations but cannot be directly linked to a specific unit
Indirect costs, such as housekeeping and administrative overhead, support the organization but are allocated rather than directly charged to a unit.
When preparing a staffing budget, the nurse manager must account for productive versus non-productive hours. Non-productive hours include:
Answer: Paid time off, sick leave, and education time
Non-productive hours are paid hours during which employees are not directly providing patient care, including vacation, sick days, and in-service training.
The ANM is reviewing a proposal to add a full-time RN position. Which financial metric would BEST demonstrate the value of this investment to administration?
Answer: Return on investment including quality and safety outcomes
ROI that incorporates quality metrics such as reduced falls, infections, or readmissions demonstrates comprehensive financial and operational value.
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