Question 1

The RNs base salary is $52,000, and the nurse is to get a 2% merit raise. Based on this information, the new projected base salary will be

Accepted Answer

A)   $52,500.
B)   $53,040.
C)   $53,57
D)   $53,560. B

Question 2

A client's spouse is concerned about the cost of hospitalization. The nurse says, "Because your spouse is on Medicare, the hospital will be paid according to the DRG." What does the nurse mean by this statement?

Accepted Answer

A)   Medicare will pay the total cost for the care provided.
B)   Medicare will pay an average of the total costs.
C)   Medicare will pay based on the usual cost of the treatments provided.
D)   Medicare will pay based on a set amount for the specific condition for which the client was hospitalized. D

Question 3

The newly hired nurse manager is involved in the first budgetary cycle since being hired. The manager lists some capital equipment needs and is surprised when they are not available for staff use two months after the request. What is the reason for this?

Accepted Answer

A)   The equipment was not approved by the manager's supervisor.
B)   The budgetary cycle takes up to 1 year to occur.
C)   The hospital has experienced a downturn in revenue and is not fulfilling promises.
D)   The nurse manager failed to complete the correct request. B

Question 4

The medical-surgical nursing manager notices the education expenditure for the month is over budget. How should the manager deal with this difference?

Accepted Answer

A)   Complete an expenditure report for the month.
B)   Complete a variance report for the month's budget.
C)   Forward a non-revenue-producing report to the administration.
D)   Forward the expense line budget to the administration.

Question 5

A nurse manager of a medical unit and a nurse manager of a critical care unit are discussing their personnel budgets. The medical unit budget is higher than the critical care unit budget. What are plausible reasons for this difference? Note: Credit will be given only if all correct choices and no incorrect choices are selected. Select all that apply.

Accepted Answer

A)   There is a higher turnover rate of nursing staff on the medical unit.
B)   Costs were incurred during a recent remodeling of the medical unit.
C)   The client acuity on the critical care unit is higher.
D)   The critical care manager is a better manager than the medical unit manager.
E)   More staff on the medical unit received premium pay this year.

Question 6

As a member of the budgeting committee, the nurse manager reviews the salaries for file clerks in the accounting department. These salaries should be included in which budget item?

Accepted Answer

A)   The fixed cost
B)   The variable cost
C)   The indirect cost
D)   The direct cost

Question 7

The budget committee of a hospital is holding the first meeting of the budgetary cycle in two weeks. The finance department is preparing an information packet to be distributed to members. What statistical information should be included? Note: Credit will be given only if all correct choices and no incorrect choices are selected. Select all that apply.

Accepted Answer

A)   The average daily census for the facility over the last year
B)   Current community wage ranges for employee classifications
C)   Changes in accrediting body or legislative regulations
D)   Number of nurses whose employment was terminated for cause over the last year
E)   Current staff mix across the hospital

Question 8

The nurse manager tells the staff that this year's budget numbers will not change, even if census drops over the rest of the year. How should the staff interpret this information?

Accepted Answer

A)   The budget is a fixed one.
B)   The hospital uses incremental budgets.
C)   The hospital uses a variable budget.
D)   The hospital starts the budgeting process with a zero-based budget.

Question 9

The nurse manager identified that the census was higher than anticipated and the client acuity level was also high; however, fewer nursing hours are paid. This variance is an example of which budgetary variance?

Accepted Answer

A)   Efficiency
B)   Nonsalary expenditure
C)   Rate
D)   Volume

Question 10

A hospital's budget is incremental. Which statement by the nurse manager reflects use of this type of budget? Note: Credit will be given only if all correct choices and no incorrect choices are selected. Select all that apply.

Accepted Answer

A)   "The finance department sent me the budget worksheet with last year's expenses."
B)   "We have $1,000 left in our education account that we need to spend before the year is over. Who has an idea for a class to attend?"
C)   "I have to justify all our activities as if we have never done them before."
D)   "I like this type of budget preparation because it is fairly simple and straightforward."
E)   "In order to create next year's budget, I am to start at 80% of what we budgeted last year."

Question 11

The nurse manager's goal is to adequately staff the unit and use minimal supplementary staff. The manager has added the cost of this supplementary staff to the unit's operating budget. A colleague informs the manager it should have been added to which budget?

Accepted Answer

A)   The personnel budget
B)   The operating budget
C)   The revenue budget
D)   The fixed budget

Question 12

The nurse manager of a critical care unit creates the operating budget with the knowledge that a minimum of two professional nurses must be paid per shift regardless of the patient census. Which group determines this standard?

Accepted Answer

A)   Hospital administration
B)   Nursing administration of the hospital
C)   The Joint Commission
D)   Nursing personnel of the special care units

Question 13

A hospital has used capital funds to purchase a new piece of diagnostic equipment. The hospital's chief financial officer (CFO) says, "The cost of this equipment will be expensed out across all units that use it." How should the nurse manager interpret this statement?

Accepted Answer

A)   The equipment is jointly owned by all units that use it.
B)   If clients on the manager's unit require the use of this equipment, a portion of the cost will be charged to the unit.
C)   The equipment will be rented to the units for use.
D)   The nurse manager will ask physicians to refrain from using the equipment.

Question 14

A nurse manager has received the following email from the finance department: "Your unit's budget for travel is $1,500 for the fiscal year. The unit's actual expenditures have been $2,120." The unit is over budget by ________%. Round to the nearest hundredth percent.

Accepted Answer

The answer of A nurse manager has received the following...

Question 15

The nurse manager is updating the position control sheet for the fiscal year prior to beginning a new budgetary cycle. What would the manager include in this sheet? Note: Credit will be given only if all correct choices and no incorrect choices are selected. Select all that apply.

Accepted Answer

A)   The FTE factor for an LPN hired this month
B)   The current wage range for RNs working on the units
C)   The names of all unit clerks working in the unit
D)   The level of licensure of a nurse working on the unit
E)   The fact that two RNs have retired this year

Question 16

A nursing executive is comparing the entire hospital financials for the month and notes that the medical laboratory's revenue is higher than environmental services. What is a possible explanation?

Accepted Answer

A)   The laboratory has increased charges for its services.
B)   Environmental services is a non-revenue-producing cost center.
C)   The laboratory is a non-revenue-producing cost center.
D)   The nursing units affect the laboratory charges.

Question 17

During an interview with a potential employee, the nurse manager tells the individual that an additional 10% of the hourly rate will be paid for working the 7:00 p.m. to 7:00 a.m. shift. What is another way the manager could have described this difference in pay?

Accepted Answer

A)   "You will receive an additional 10% for overtime."
B)   "The night shift differential is 10%."
C)   "Your evening premium is 10%."
D)   "You will get a 10% cost-of-living raise for working the night shift."

Question 18

A nurse manager writes the following note: "Over personnel budget by $1,250 in April due to late snowstorm. Nurses unable to get to work. Overtime wages paid." Why is this note important?

Accepted Answer

A)   It will help the manager create the budget for the next year.
B)   It is required by the Joint Commission.
C)   All variances must be documented and forwarded to the hospital attorney.
D)   It ensures that there is no question of diversion of hospital funds.

Question 19

A nursing assistant tells a nurse, "I am going to have to call in sick tomorrow because I don't have a babysitter." How should the nurse respond to this information?

Accepted Answer

A)   The assistant's sick time is earned and should be used in any way the assistant wishes.
B)   The assistant should use personal time, not sick time, for this situation.
C)   The assistant's absence will not be a major problem for the unit as long as only one day is missed.
D)   It will be okay for the assistant to miss a day because it will help another assistant get overtime wages.

Question 20

The nurse manager is reviewing the previous month's budget and notes a favorable efficiency variance of the full-time equivalents (FTEs). Which options may be reasons for this favorable variance? Note: Credit will be given only if all correct choices and no incorrect choices are selected. Select all that apply.

Accepted Answer

A)   Greater client acuity
B)   Extravagant use of resources
C)   Understaffing the unit
D)   Low client acuity
E)   Use of agency nurses to supplement staff

Exam 15: Budgeting and Managing Fiscal Resources