During the review of the previous budget with the actual numbers ...

[azncindy619]

During the review of the previous budget with the actual numbers to determine variances, a price variance was discovered on the Orthopedic Unit. Which of the following scenarios might have resulted in this type of variance?
 
  1. The minimum wage increased by 4, and this affected the wages of three patient care assistants.
  2. The cost of Foley catheter insertion kits increased by 9 during the last year.
  3. The number of knee replacements performed decreased by 14.
  4. The unit began accepting postoperative clients from the Surgical Intensive Care Unit.

Question 2

The nurse managers are discussing the health care organization's recent adoption of a zero-based budget. Which of the following statements is most closely associated with a zero-based budget?
 
  1. It doesn't take very long to do this type of budget.
  2. The most difficult part about this type of budget is trying to find strong rationale to keep something I've had for the last 3 years.
  3. It's nice to be able to adjust from the information I've used in the previous budget report.
  4. I can just focus on this department. I don't have to worry about coordinating my budget with any other manager.

[lucas dlamini]

Answer to Question 1

Answer: 2

Rationale: There are four types of variances: mix variance, volume variance, cost variance, and price variance. A price variance occurs when the actual amount of money paid for a product or service varies from the projected expense. When the price increased to buy a Foley catheter insertion tray, it produced a price variance. A cost variance occurs when labor rates increase or decrease. A mix variance or volume variance can occur as a result of a change in the type of clients the unit serves. Volume variances typically occur based on a change in a specific type of utilization rate of some service.

Answer to Question 2

Answer: 2

Rationale: A zero-based budget is difficult to create because each expense must be re-justified to continue to spend the money again in the future. This budget is very time-consuming to produce. It can result in major changes in plans or direction, and other interacting departments must be included while creating this type of budget. The other type of budget is a flexible-based budget. This is created by using information from previous budget reports to come up with the new budget. This is much less time-consuming and easier to produce. This type of budget is done through a series of adjustments from the previous budget report.