Standard Text:
Correct Answer: 0.12
Rationale : To arrive at this figure, add the number of days off, multiply by 8 hours per shift, and divide by 2080
(number of hours worked yearly by one FTE). 0.12 of an FTE will be added per employee to the salary budget.
Global Rationale:
Cognitive Level: Analyzing
Client Need: Safe Effective Care Environment
Client Need Sub: Management of Care
Nursing/Integrated Concepts: Nursing Process: Implementation
Learning Outcome: 14-3: Demonstrate how to monitor and control budgetary performance.
Question 15
Type: MCSA
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?
1. The laboratory has increased charges for its services.
2. Environmental services is a non-revenue-producing cost center.
3. The laboratory is a non-revenue-producing cost center.
4. The nursing units affect the laboratory charges.
Client Need: Safe Effective Care Environment
Client Need Sub: Management of Care
Nursing/Integrated Concepts: Nursing Process: Evaluation
Learning Outcome: 14-2: Differentiate among types of budgets.
Sullivan, Effective Leadership and Management, 8/e Test Bank
Copyright 2013 by Pearson Education, Inc.
Question 16
Type: MCMA
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.
Standard Text: Select all that apply.
1. There is a higher turnover rate of nursing staff on the medical unit.
2. Costs were incurred during a recent remodeling of the medical unit.
3. The client acuity on the critical care unit is higher.
4. The critical care manager is a better manager than the medical unit manager.
5. More staff on the medical unit received premium pay this year.
Client Need: Safe Effective Care Environment
Client Need Sub: Management of Care
Nursing/Integrated Concepts: Nursing Process: Evaluation
Learning Outcome: 14-3: Demonstrate how to monitor and control budgetary performance.
Question 17
Type: MCMA
Sullivan, Effective Leadership and Management, 8/e Test Bank
The chief nurse officer (CNO) is planning the budget for the coming year. A new position has been added to the
nursing administration cost center. The CNO is determining how many benefit hours should be allocated for this
new position. Which days should the CNO include in this calculation?
Note: Credit will be given only if all correct choices and no incorrect choices are selected.
Standard Text: Select all that apply.
1. Sick days
2. Weekend days
3. Vacation days
4. Holidays
5. Bereavement days
2. Complete a variance report for the month’s budget.
3. Forward a non-revenue-producing report to the administration.
4. Forward the expense line budget to the administration.
Client Need: Safe Effective Care Environment
Client Need Sub: Management of Care
Nursing/Integrated Concepts: Nursing Process: Planning
Learning Outcome: 14-3: Demonstrate how to monitor and control budgetary performance.
Sullivan, Effective Leadership and Management, 8/e Test Bank
Copyright 2013 by Pearson Education, Inc.
Question 20
Type: MCSA
Every month the chief financial officer (CFO) reviews the budget with the hospital’s board of directors. The CFO
requests a million dollars to purchase a new MRI (magnetic response imaging) unit for the radiology department.
Which category best describes this request?
1. Non-revenue expense
2. Capital expense
3. Variable cost
4. Allocation of funds
Client Need: Safe Effective Care Environment
Client Need Sub: Management of Care
Nursing/Integrated Concepts: Nursing Process: Implementation
Learning Outcome: 14-2: Differentiate among types of budgets.
Question 21
Type: MCSA
A nurse manager is trying to educate the staff regarding efficiency and how it affects the unit’s costs. Strategies to
increase efficiency could include which of the following?
1. Increasing the number of unlicensed assistants providing direct nursing care
2. Limiting dressing supplies on the nursing unit
3. Labeling the cost of each item in the clean supply closet
4. Eliminating staff education sessions
Sullivan, Effective Leadership and Management, 8/e Test Bank
Rationale 2: Wage ranges in the market are critical information for the budget committee.
Rationale 3: Regulation changes often result in an increase in cost.
Rationale 4: Information regarding number of nurses terminated for cause will not be helpful to the budgeting
committee.
Rationale 5: Staff mix for all departments is necessary for this committee.
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: 14-1: Describe how the budgeting process works.
Question 23
Type: FIB
The finance department of the hospital has distributed information for the next budget cycle that includes a
projected 0.19 inflation factor in the cost of water. If the hospital spent $285,000 on water last year, the projected
cost of water for this year would be $_______.
Standard Text:
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 24
Type: MCSA
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?
Sullivan, Effective Leadership and Management, 8/e Test Bank