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The operational budgeting projects the revenue and expenses of a company for the next financial year, while the capital budget is the cost of acquiring assets, machines, or equipment to support the smooth running of a business. The manager should justify the need to spend on a new asset to facilitate the running of the business. The justification is based on the relationship between the two types of capital. For example, the amount of capital necessary to support the operational budget.

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A budget variance is a deviation from the projected revenue or cost in a particular account. One source of variance is a revenue shortfall from inaccuracy in estimating. Another source is an unexpected event that affects operating costs. It is important for the finance manager to look at the past financial statements when budgeting in monitoring, investigating, and controlling the sources of budget variation. It is also important to collect information to understand the organization and the market to prevent avoidable variance. The three reasons to investigate budget variance include to avoid budgetary overruns, to have a real picture of revenue and expenditure, and to track spending.

  1. 3

The pieces required to calculate nursing hours per patient day are the overall number of hours worked by nurses and the number of patients at the medical facility. Nursing staffing measures are the benchmarks for determining nursing hours per patient day. They are evaluated under the American Nursing Association (ANA), which develops the standards for effectiveness in nursing.

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Fixed costs are those expenses that do not vary with output. An example of a fixed cost is the purchase of clinical office space. A variable cost varies with output and can vary at a constant rate, depending on capital and labor. An example of a variable cost is wages.

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