Sullivan, Effective Leadership and Management, 8/e
Chapter 14
Question 1
Type: MCSA
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?
1. The budget is a fixed one.
2. The hospital uses incremental budgets.
3. The hospital uses a variable budget.
4. The hospital starts the budgeting process with a zero-based budget.
Client Need: Safe Effective Care Environment
Client Need Sub: Management of Care
Nursing/Integrated Concepts: Nursing Process: Planning
Learning Outcome: 14-2: Differentiate among types of budgets.
Question 2
Type: MCSA
The nurse manager identified that the census was higher than anticipated and the client acuity level was also high;
however, there were fewer nursing hours paid. This variance is an example of which budgetary variance?
1. Efficiency
Sullivan, Effective Leadership and Management, 8/e Test Bank
2. Nonsalary expenditure
3. Rate
4. Volume
Rationale 3: Indirect costs are expenditures that are necessary but do not affect client care directly.
Rationale 4: Direct costs are expenses that directly affect client care such as nursing personnel who provide
hands-on client care.
Global Rationale:
Cognitive Level: Applying
Client Need: Safe Effective Care Environment
Client Need Sub: Management of Care
Nursing/Integrated Concepts: Nursing Process: Planning
Learning Outcome: 14-5: Describe how staff affect budgetary performance.
Question 4
Type: FIB
The nurse has received a commendable progress evaluation and will receive a 3 percent merit raise. The base
salary for an RN is $48,000. Based on this information, the new projected base salary for this RN will be $_____.
Standard Text:
Client Need: Safe Effective Care Environment
Client Need Sub: Management of Care
Nursing/Integrated Concepts: Nursing Process: Implementation
Learning Outcome: 14-5: Describe how staff affect budgetary performance.
Question 5
Type: MCSA
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?
1. The personnel budget
2. The operating budget
3. The revenue budget
Sullivan, Effective Leadership and Management, 8/e Test Bank
4. The fixed budget
Global Rationale:
Cognitive Level: Applying
Client Need: Safe Effective Care Environment
Client Need Sub: Management of Care
Nursing/Integrated Concepts: Nursing Process: Implementation
Learning Outcome: 14-1: Describe how the budgeting process works.
Question 7
Type: MCSA
During an interview with a potential employee, the nurse manager tells the individual that an additional 10 percent
of the hourly rate will be paid for working the 7:00 pm–7:00 am shift. What is another way the manager could
have described this difference in pay?
1. “You will receive an additional 10 percent for overtime.”
2. “The night shift differential is 10 percent.”
3. “Your evening premium is 10 percent.”
4. “You will get a 10 percent cost-of-living raise for working the night shift.”
Client Need: Safe Effective Care Environment
Client Need Sub: Management of Care
Nursing/Integrated Concepts: Nursing Process: Implementation
Learning Outcome: 14-5: Describe how staff affect budgetary performance.
Question 8
Type: MCSA
Sullivan, Effective Leadership and Management, 8/e Test Bank
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?
1. Hospital administration
2. Nursing administration of the hospital
3. The Joint Commission
4. Nursing personnel of the special care units
2. “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?”
3. “I have to justify all our activities as if we have never done them before.”
4. “I like this type of budget preparation because it is fairly simple and straightforward.”
5. “In order to create next year’s budget, I am to start at 80 percent of what we budgeted last year.”
Rationale 1: Greater client acuity than allowed for in the budget would likely result in an unfavorable efficiency
variance.
Rationale 2: Using more resources than the budget allows would result in an unfavorable efficiency variance.
Rationale 3: Understaffing the unit would mean fewer nursing salary hours. This would result in a favorable
efficiency variance, but would not be a good long-term plan for quality of care.
Rationale 4: If client acuity is lower, fewer staff members are needed. This would result in a favorable efficiency
variance.
Rationale 5: If agency nurses were used to supplement staff, the efficiency variance would be unfavorable.
Global Rationale:
Cognitive Level: Analyzing
Client Need: Safe Effective Care Environment
Client Need Sub: Management of Care
Nursing/Integrated Concepts: Nursing Process: Evaluation
Learning Outcome: 14-4: Explain how to determine budget variance.
Question 12
Type: MCSA
The nurse manager is creating the budget for the next fiscal year. Because the client census has been higher in the
past year, more supplies were used. Which type of cost does this reflect?
1. Fixed costs
2. Variable costs
3. Direct costs
4. Zero-based costs
Cognitive Level: Applying
Client Need: Safe Effective Care Environment
Client Need Sub: Management of Care
Nursing/Integrated Concepts: Nursing Process: Planning
Learning Outcome: 14-1: Describe how the budgeting process works.
Question 13
Type: MCSA
With the current health care industry focus on managed care, nurses must be more cost-conscious. Which option
is an example of a nurse being cost-conscious?
1. The nurse reviewing the client’s itemized bill each day
2. The nurse’s decision to use fewer supplies when changing a dressing
3. The nurse manager reviewing client costs on a daily basis
4. The nurse manager requesting that the materials management director obtain quotes for less expensive items
Client Need: Safe Effective Care Environment
Client Need Sub: Management of Care
Nursing/Integrated Concepts: Nursing Process: Implementation
Learning Outcome: 14-5: Describe how staff affect budgetary performance.
Question 14
Type: FIB
The unit employs 35 FTEs (full-time equivalents) based on an 8-hour shift. The average benefits for these FTEs
are 12 vacation days, 10 holidays, 6 sick days, and 4 personal days. Based on these figures, the FTE required per
employee to replace benefit time is _____ FTE. Round to the nearest hundredth FTE.
Sullivan, Effective Leadership and Management, 8/e Test Bank