Nurse Executive Test Nurse Executive Test Financial Management & Budgeting 2

Question 1

Which of the following best describes a zero-based budget?

Accepted Answer

A budget where all expenses must be justified from scratch each budget cycle

Answer

Zero-based budgeting requires every expense to be justified anew rather than automatically continuing prior year allocations.

Question 2

What are productive FTE hours in nursing workforce management?

Accepted Answer

Hours spent directly on patient care activities

Answer

Productive FTE hours represent time actually spent on direct patient care, excluding paid time off and other non-productive paid time.

Question 3

In nursing budget management, the term 'cost center' refers to:

Accepted Answer

A specific department or unit whose costs are tracked independently

Answer

A cost center is any department where expenses are tracked separately to monitor financial performance and ensure accountability.

Question 4

What is the purpose of a break-even analysis when proposing a new nursing program?

Accepted Answer

To identify the point at which the program's revenue equals its expenses

Answer

Break-even analysis determines the minimum service volume at which a program covers all its costs with no profit or loss.

Question 5

Which of the following is an example of a variable cost in nursing unit operations?

Accepted Answer

Medical supplies consumed per patient

Answer

Variable costs fluctuate directly with patient volume, such as supplies consumed based on the actual number of patients treated.

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