Chapter 16 Budgeting Basics for Nurses

Chapter 16  Budgeting Basics for Nurses

Complete Chapter Questions And Answers
 

Sample Questions

MULTIPLE CHOICE

1. The nurse manager plans the fiscal budget to include salaries for two registered nurses for two 12-hour shifts with a patient census of six in the short stay observation room. The nurse manager reviews the budget report 3 months later and notes that the salary expenses are higher than was budgeted because of higher than planned RN staff salaries. This additional RN staff is necessary to meet patient care needs because the census has remained constant at 10 patients rather than the 6 projected when the budget was developed. The difference between the planned budget and the actual cost is known as
A.
revenue.
B.
variance.
C.
monitoring.
D.
capital expenditures.

ANS: B
(B) is correct because variance is the difference between the planned budget and actual results; it can be a positive or a negative discrepancy. (A) is incorrect because revenue is the income, but it is not analyzed to detect variations between predicted and actual expenses. (C) is incorrect because monitoring is the process by which variances are identified. (D) is incorrect because capital expenditures, which are long-term investments such as bedside computers, are part of the budget but are included in comparison with projected results.

DIF: Application REF: Pages 360, 369

2. A nursing unit’s census consists primarily of long-term residents with a high risk for falls. To meet new safety regulations, the nurse manager must plan to replace all 50 patient beds with new beds equipped with “Fall Watch” electronic sensors that will detect when patients get out of bed. The manager will be involved in which type of budgeting to replace the beds?
A.
Fiscal
B.
Labor
C.
Operational
D.
Capital

ANS: D
(D) is correct because capital budgets are concerned with major purchases such as equipment paid for over several years. (A) is incorrect because a fiscal budget is projected over 12 months, whereas capital budgets involve long-term financial planning. (B) is incorrect because labor budgets are concerned with salaries, wages, and benefits of employees. (C) is incorrect because operational budgets are composed of expenses needed to operate on a daily basis and revenue received for services rendered.

DIF: Application REF: Page 365

3. The nurse manager is preparing a budget that does not base annual budgets on the revenue and expenditures of the prior year and has the advantage that outdated information is not integrated into the budget. The manager is using which budget method?
A.
Zero-based
B.
Incremental
C.
Labor
D.
Operational

ANS: A
(A) is correct because the zero-based method is based on the assumption of no volume and no resources assigned; it essentially starts each new budget period at zero rather that building from past budgets. (B) is incorrect because the incremental method uses the current budget with an incremental increase in consideration of future growth. (C) is incorrect because labor budgets represent a type of budget, rather than a method of budgeting. (D) is incorrect because operational is a type of budget rather than a method of budgeting.

DIF: Application REF: Page 366

4. A nurse on the unit is heard saying, “I am not going to document that I used four catheters to start that IV; it doesn’t matter anyway.” What action can help the staff nurse understand the financial budget goals of the unit?
A.
Have the nurse work in payroll for a week.
B.
Enroll the staff in CEU for personal finance.
C.
Ask the nurse to represent the unit on the budget planning committee.
D.
Make the nurse responsible for monitoring all disposable equipment and supplies.

ANS: C
(C) is correct because participating on the committee will give the nurse ownership of the unit’s budget and will provide insight into the unit’s budgetary goals. (A) is incorrect because having the nurse work in payroll would not help the nurse understand the intricacies of budgeting. (B) is incorrect because a personal budget may have some aspects of a unit budget but will not help the nurse understand the unit budgetary goals. (D) is incorrect because keeping a log will not help the nurse integrate the concept of accountability in budgeting.

DIF: Analysis REF: Page 361