CHFM Finance and Budgeting 4

Question 1

A healthcare facility manager calculates that the break-even point for a new outpatient service requires 850 patient visits per month. If current volume is 700 visits, the service is operating at:

Accepted Answer

A loss

Answer

When actual volume (700) is below the break-even point (850), fixed costs are not fully covered and the service operates at a loss.

Question 2

Which of the following is an example of an indirect cost in a healthcare facility operations budget?

Accepted Answer

Facility management overhead allocated to departments

Answer

Indirect costs like facility management overhead cannot be directly traced to a single cost center and are allocated across departments.

Question 3

A facility manager submits a capital project with a 3-year payback period. Administration requires a maximum payback period of 5 years. This project would be considered:

Accepted Answer

Financially acceptable

Answer

The 3-year payback period is within the 5-year threshold, making the project financially acceptable under the payback criterion.

Question 4

In the context of healthcare facility budgeting, 'favorable variance' for an expense account means:

Accepted Answer

Actual spending was less than the budget

Answer

A favorable expense variance occurs when actual costs are lower than budgeted, which is a positive outcome for financial management.

Question 5

Which cost estimation method for capital projects uses historical data from similar completed projects to predict future costs?

Accepted Answer

Analogous estimating

Answer

Analogous estimating uses actual costs from past similar projects as a basis for estimating the current project's cost.

CHFM - Certified Healthcare Facility Manager Practice Test

CHFM - Certified Healthcare Facility Manager Practice Test

CHFM Finance and Budgeting 4