Reference no: EM13762351
Question 1
Why is effective management of cost in a health care organization important? What may you do as a health care financial manager to evaluate and monitor cost?
Question 2
Chap 8- Do you or your supervisor have to deal with depreciation expense? If so, please describe the circumstances. Have you ever had to compute depreciation expense? If so please describe the circumstances.
Question 3
What would you consider when reviewing a budget? Under what conditions is a flexible budget more effective than a forecast budget?
Question 4
The concept of forecast and flexible budgets can be difficult to grasp initially. In my experience, when constructing a corporate budget, whether you choose a forecast methodology or a flexible methodology, you start with the same assumptions about revenue, expenses, the future business environment, etc. Initially, the two methodologies would develop the exact same budget. The difference between them starts to appear as the budget period goes on. A forecast budget will remain static throughout the period, i.e. no changes will be made (Baker & Baker, 2014). However, a flexible budget may change based on the results of previous months (Baker & Baker, 2014). For example, if your facility saw increased patients over the first quarter of a year a flexible budget may have its expenses and revenue adjusted for the remaining three quarters of the year. A key principle to keep in mind is that a flexible budget can only be updated after changes have occurred, e.g. you cannot "flex" current funds to cover deficits in other departments. With this as your foundation, in what circumstances might a flexible budget be more effective?
Question 5
Experience has taught me that forecast budgets are often more effective in a broader set of circumstances than flexible budgets. This is because a flexible budget is not exactly what its name indicates. A flexible budget is a budget that can be changed as the business environment changes and is only effective in unpredictable environments (Baker & Baker, 2014). This is because a flexible budget can only be updated after changes in revenue and expense have occurred and only for the future period, i.e. if you expenses increased last quarter you can change the budget for the remaining quarters. A flexible budget cannot be "flexed" to cover current or past changes.
Additionally, the work necessary to maintain a flexible budget is significant - not only within the finance department. I was once involved in a situation where a department head, based on their current budget, was understaffed and finishing the interview process - making offers to three good candidates. Following an update to the flexible budget, the department head was now overstaffed by four FTEs. This meant that the three offers had to be withdrawn and that the department head had to layoff four additional staff members. This sort of management workload is common in flexible budget environments. With this scenario in mind, do you think that a forecast budget is more effective than a flexible budget? Why or why not?
Question 6
Chap 15- Do you believe your organization uses a flexible or a static budget? Why do you think so? If you reviewed a budget at your workplace, do you think the major increases and decreases could be explained?
Question 7
If you were assigned to prepare a capital expenditure budget request, what two
people would you most want to have on your team? Why? How would you expect to
use them?
Question 8
The local school system asks you to submit a proposal to do pre-employment physicals for 60 bus drivers. What financial or accounting information do you need to submit the proposal? What will you charge the school system?
Question 9
See attached worksheet-Don't plagiarize, cite and reference
Question 10
Write a 200-word summary that addresses the following:
o What is the effect of revenue sources on financial reporting at the hospital