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Budgeting Basics For Nurses

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Question 1
Free
Multiple Choice

A nurse manager plans the fiscal budget to include salaries for two RNs for two 12-hour shifts with a patient census of 6 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:

Choose correct answer/s
A

revenue.

B

variance.

C

monitoring.

D

capital expenditures.

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Question 2
Free
Multiple Choice

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?

Choose correct answer/s
A

Fiscal

B

Labor

C

Operational

D

Capital

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Question 3
Free
Multiple Choice

A 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a budget that does not base annual budgets on the revenue and expenditures of the prior year and has the advantage that outdated information is not integrated into the budget.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?

Choose correct answer/s
A

Zero-based

B

Incremental

C

Labor

D

Operational

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Question 4
Free
Multiple Choice

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?

Choose correct answer/s
A

Have the nurse work in payroll for a week.

B

Enroll the staff in continuing education units (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.

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Question 5
Free
Multiple Choice

In a large health care facility, the executive administrative leaders set the budget goals to decrease full-time equivalents by 3%, eliminate the cost of agency nurses, reduce lost revenue from lost supplies by 1%, and provide a 0.5% hourly salary incentive for working on a float unit when the assigned unit has a low census. Nurse managers meet with nursing administrators to design their unit budgets to meet these established goals. The budget approach that is being used is the _____ approach.

Choose correct answer/s
A

top-down

B

participatory

C

iterative

D

incremental

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Question 6
Multiple Choice

Which component of budgeting might normally be addressed in the annual performance evaluation for a nurse manager?

Choose correct answer/s
A
Including in the labor budget costs for overtime and benefits
B
Managing variances in nursing overtime costs and supply usage
C
Accurately predicting revenues on the basis of unit-of-service
D
Providing qualitative analysis for variances in the capital budget
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Question 7
Multiple Choice

A primary function of the budgeting process is to provide managers with an opportunity to:

Choose correct answer/s
A
insist that salary increases for all nurses are included in the annual budget.
B
discuss concerns about resource allocation with leaders of the organization who are capable of resolving issues.
C
develop a mechanism for changing from zero-based budgeting to incremental budgeting.
D
develop for all staff an educational program related to supply usage.
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Question 8
Multiple Choice

Organizations measure the effectiveness of their budgets by examining actual revenues and expenditures versus:

Choose correct answer/s
A
planned variances.
B
incremental budgets.
C
productivity metrics.
D
expected performance.
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Question 9
Multiple Choice

When the nurse manager conducts a qualitative analysis of budget variances, he or she is:

Choose correct answer/s
A
determining the percentage increase of supply usage from the last quarter to the current quarter.
B
identifying the overall increase in the dollar amount of salaries paid for overtime.
C
comparing productivity metrics across all nursing units in the facility.
D
reconciling with current conditions the underlying assumptions on which the budget was based.
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Question 10
Multiple Choice

A nurse manager is working with the financial officer to develop the budget of the nursing unit for the next fiscal year. The nurse manager tells the financial officer that which of the following pieces of information will affect budget assumptions?

Choose correct answer/s
A
The capital budget request for new emergency department equipment has been turned in for consideration by the hospital's administrative team.
B
The patient census likely will increase during the next fiscal year because two large physician groups have transferred their admission privileges to this hospital.
C
The participatory budgeting approach instituted last year has been helpful in controlling supply costs.
D
Zero-based budgeting will help the managers to be more efficient in establishing next year's budget.
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Question 11
Multiple Choice

The nurse manager meets with upper management to share strategic goals agreed upon by her staff for their individual nursing unit as the first step to begin budget negotiations. One strategic goal is that staff will have access to technology that will allow them to incorporate point-of-care devices for all RNs. The second goal is to improve RNs' ability to recognize critical indicators that a patient's health status is deteriorating through advanced health assessment skills. During the meeting the manager discusses the strategy options and selecting the one that works for the unit. Which type of budget development is used?

Choose correct answer/s
A
Iterative
B
Top-down
C
Participatory
D
Zero-based
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Question 12
Multiple Choice

The nursing executive team met to review last year's productivity metric to strategize for the upcoming year's metric. The team wants to be certain the productivity metric shows productivity was:

Choose correct answer/s
A
high.
B
low.
C
balanced.
D
iterative.
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Question 13
Multiple Choice

The nurse manager meets with upper administration and learns that the strategic plan for nursing is to have 80% BSN staff within the next 3 years. The nurse manager then built her budget to meet the organization's strategic goal by providing tuition reimbursement and flexible work hours, which required some agency staffing. Which approach to budgeting is used?

Choose correct answer/s
A
Iterative
B
Top-down
C
Participatory
D
Zero-based
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Question 14
Multiple Choice

Nurses on a unit met with the nurse manager as part of participatory budgeting. They ask, "What exactly is the difference between fixed and variable costs? Understanding this will help us better understand the budgeting process." The manager provides a definition and asks the staff to list types of direct and indirect cost. Which example would indicate a need for further teaching?

Choose correct answer/s
A
Fixed costs would include accreditation fees.
B
Fixed cost would include the cost for the automated medication-dispensing system.
C
Variable cost would include the nurse manager's salary.
D
Variable cost would include the salary expense for registered nurses.
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Question 15
Multiple Choice

A nurse manager has calculated that providing 75 hours of direct nursing care per day requires that 120 hours must actually be worked by nursing staff. The manager is involved in: (select all that apply)

Choose correct answer/s
A
developing the capital budget.
B
applying productivity metric.
C
monitoring the labor budget.
D
incremental budgeting processes.
E
addressing budget assumptions.
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Question 16
Multiple Choice

A nurse has recently been appointed to the position of nurse manager. To become successful in managing the unit's budget, the new nurse manager should: (select all that apply)

Choose correct answer/s
A
read the financial policy manual to learn more about the organization's budgeting process.
B
allow the nursing administration office to manage the unit's budget until he or she is able to complete an online financial management course.
C
communicate regularly with a person in the hospital's finance office about interpreting budget reports.
D
pay attention to only the bottom-line numbers in budget reports rather than trying to understand each line in these reports.
E
discuss the process of developing budgets with other members of the management team.
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Question 17
Essay

The financial plan required for the distribution of resources and expenses is a _________ .

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