Chapter 14 My Nursing Test Banks

Sullivan, Effective Leadership and Management, 8/e
Chapter 14

Question 1

Type: MCSA

The nurse manager tells the staff that this years 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.

Correct Answer: 1

Rationale 1: A fixed budget is one in which budgeted amounts are set regardless of changes that occur during the year, such as patient volume or program activities.

Rationale 2: An incremental or line-by-line budget lists each expense item or category on a separate expense line. It is not possible to tell from this description if the budget is incremental.

Rationale 3: A variable budget is developed with the understanding that adjustments to the budget may be made during the year based on changes in revenue, patient census, utilization of supplies, and other expenses.

Rationale 4: A zero-based budget assumes the base for projecting next years budget is zero. It is not possible to tell if the budget being described is a zero-based budget.

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: 14-2: 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

2. Nonsalary expenditure

3. Rate

4. Volume

Correct Answer: 1

Rationale 1: Efficiency variance is a reflection of the difference between budgeted and actual nursing care hours provided.

Rationale 2: Nonsalary expenditure variance is a deviation from the budget as a result of changes in client volume, supply quantities, or prices paid.

Rationale 3: Rate variance is the difference between budgeted and actual hourly rates paid.

Rationale 4: Volume variances are the differences in the budget as a result of increases or decreases in patient volume.

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: 14-4: Explain how to determine budget variance.

Question 3

Type: MCSA

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?

1. The fixed cost

2. The variable cost

3. The indirect cost

4. The direct cost

Correct Answer: 3

Rationale 1: Fixed costs are costs that will remain the same for the budget period regardless of the activity level of the organization.

Rationale 2: Variable costs depend on and change in direct proportion to client volume and acuity.

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: 

Correct Answer: 49,440

Rationale : If a 3 percent merit raise is projected and the base salary for an RN is $48,000, then the new base becomes $49,440. $48,000 multiplied by 0.03 equals $1,440. Add $1,440 to $48,000 to determine the new base salary.

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: 14-5: Describe how staff affect budgetary performance.

Question 5

Type: MCSA

The nurse managers goal is to adequately staff the unit and use minimal supplementary staff. The manager has added the cost of this supplementary staff to the units 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

4. The fixed budget

Correct Answer: 1

Rationale 1: The personnel budget projects the salary costs that will be paid and charged to the cost center in the budget period.

Rationale 2: The operating budget is the organizations statement of expected revenues and expenses for the coming year.

Rationale 3: The revenue budget represents the patient care income expected for the budget period.

Rationale 4: Because the salary cost of supplementary staff is an unknown, the costs are variable, not fixed.

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: 14-2: Differentiate among types of budgets.

Question 6

Type: MCSA

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

1. Medicare will pay the total cost for the care provided.

2. Medicare will pay an average of the total costs.

3. Medicare will pay based on the usual cost of the treatments provided.

4. Medicare will pay based on a set amount for the specific condition for which the client was hospitalized.

Correct Answer: 4

Rationale 1: Total cost is the amount of the charges for which the client is billed. Medicare reimbursement does not equal this amount.

Rationale 2: An average for the costs is not a payer amount used by the health care industry.

Rationale 3: Medicare does not pay based upon the usual cost of the procedure.

Rationale 4: Medicare payment for inpatient services is currently made at a predetermined specific rate for each Medicare recipient based on the patients diagnosis. Care is classified into diagnosis-related groups (DRGs).

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 pm7:00 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.

Correct Answer: 2

Rationale 1: Overtime is paid to personnel who work more than 40 hours per week. Historically, overtime is calculated by multiplying the amount of overtime worked by 1.5 times the hourly rate.

Rationale 2: Most facilities use a set percentage to be paid to personnel who work evenings, nights, weekends, and holidays, which is known as a shift differential.

Rationale 3: Premiums are fixed dollar amounts added to the base rate of an employee who has earned a certification or has some advanced clinical achievement.

Rationale 4: Cost-of-living raises are factored into budget projections and are not related to shift work.

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: 14-5: Describe how staff affect budgetary performance.

Question 8

Type: MCSA

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

Correct Answer: 1

Rationale 1: The hospital makes the final determination of which staffing ratios are considered safe for their units. This determination may be made with the input of nursing administration and nursing personnel, but the final determination becomes an institutional policy.

Rationale 2: This determination may be made with the input of nursing administration and nursing personnel, but the final determination becomes an institutional policy.

Rationale 3: The Joint Commission assures that the institution is following its own policies.

Rationale 4: This determination may be made with the input of nursing administration and nursing personnel, but the final determination becomes an institutional policy.

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: 14-5: Describe how staff affect budgetary performance.

Question 9

Type: MCMA

A hospitals 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.

Standard Text: Select all that apply.

1. The finance department sent me the budget worksheet with last years expenses.

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 years budget, I am to start at 80 percent of what we budgeted last year.

Correct Answer: 1,2,4

Rationale 1: Developing an incremental budget may begin with documentation of the previous years actual expenses.

Rationale 2: The disadvantage of an incremental budget is that managers quickly learn to spend all that is in their budget for a specific line item. If budgets are based on the previous years performance, having budgeted money left over means it is likely that the current years budget will be cut.

Rationale 3: Justification of all activities and expenditures is a characteristic of a zero-based budget.

Rationale 4: Incremental or line-item budgeting is fairly simple and straightforward.

Rationale 5: Starting with a decreased budget is a form of zero-based budget.

Global Rationale: 

Cognitive Level: Analyzing

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 10

Type: MCSA

A nurse educator is asked by the chairperson of the department to submit a list of equipment that could be used to meet the departments goals. The list includes projectors, computers, office supplies, and computer-assisted programs. How would the educator categorize the materials?

1. As an expense

2. As part of revenue

3. As part of the capital budget

4. As part of the operating budget

Correct Answer: 3

Rationale 1: An expense budget is a comprehensive budget that lists salary and nonsalary items that reflect patient care objectives and activity parameters for the nursing unit.

Rationale 2: A revenue budget is a projection of expected income for a budget period based on volume and mix of patients, rates, and discounts.

Rationale 3: A capital budget is a component of the budget plan that includes equipment and renovations needed by an organization in order to meet long-term goals.

Rationale 4: An operating budget is the organizations statement of the expected revenues and expenses for the upcoming year.

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: 14-2: Differentiate among types of budgets.

Question 11

Type: MCMA

The nurse manager is reviewing the previous months 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.

Standard Text: Select all that apply.

1. Greater client acuity

2. Extravagant use of resources

3. Understaffing the unit

4. Low client acuity

5. Use of agency nurses to supplement staff

Correct Answer: 3,4

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

Correct Answer: 2

Rationale 1: Fixed costs are costs that remain the same for the budget period regardless of the activity level of the organization, such as insurance premiums.

Rationale 2: Variable costs depend on and change in direct proportion to client volume and acuity, such as client care supply expenses.

Rationale 3: Direct costs are expenses that directly affect client care, such as salaries for nurses.

Rationale 4: Zero-based costs are not a cost classification.

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 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 clients itemized bill each day

2. The nurses 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

Correct Answer: 2

Rationale 1: The nurse and the nurse manager do not have time nor is it their responsibility to review a clients hospital bill.

Rationale 2: The nurse can use resources wisely to decrease costs to the client and the hospital.

Rationale 3: The nurse manager does not review client costs on a daily basis.

Rationale 4: The materials management director does look for less expensive materials to provide client care supplies and hospital supplies, but it is not the responsibility of the nurse manager to direct this persons work.

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: 14-5: 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.

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 laboratorys 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.

Correct Answer: 2

Rationale 1: An increase in charges by the laboratory is not significant in this instance.

Rationale 2: Environmental services does not charge clients for its services; it is a non-revenue-producing cost center.

Rationale 3: The laboratory does charge clients for its services; it is a revenue-producing cost center.

Rationale 4: The nursing unit does affect laboratories revenue, but this is not applicable to the question.

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: 14-2: Differentiate among types of budgets.

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.

Correct Answer: 1,4,5

Rationale 1: A higher turnover rate will increase personnel costs because of the need for more personnel to train new employees.

Rationale 2: The costs of remodeling are not included in the personnel budget.

Rationale 3: Increased client acuity generally makes personnel costs rise.

Rationale 4: Better management tends to mean a more stable staff, which decreases expenditures.

Rationale 5: Premium pay increases personnel costs.

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: 14-3: Demonstrate how to monitor and control budgetary performance.

Question 17

Type: MCMA

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

Correct Answer: 1,3,4,5

Rationale 1: Sick days are benefit days.

Rationale 2: Weekend days are not benefit days.

Rationale 3: Vacation days are benefit days.

Rationale 4: Holidays are benefit days.

Rationale 5: Bereavement days are benefit days.

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: 14-3: Demonstrate how to monitor and control budgetary performance.

Question 18

Type: MCSA

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

1. Complete an expenditure report for the month.

2. Complete a variance report for the months budget.

3. Forward a non-revenue-producing report to the administration.

4. Forward the expense line budget to the administration.

Correct Answer: 2

Rationale 1: An expenditure report for the month would not explain the variance.

Rationale 2: A variance report provides a rationale for over expenses for the month that could result from a variety of unexpected expenses.

Rationale 3: Non-revenue is not relevant to determining why the unit is over budget.

Rationale 4: Expense line budgeting is not relevant to determining why the unit is over 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: 14-4: Explain how to determine budget variance.

Question 19

Type: FIB

A nurse recruiter is developing a handout to take to nursing schools in hopes of recruiting graduating seniors. The salary for a newly hired nurse is $18.15 per hour with shift differential of 20 percent for working the 7:00 pm to 7:00 am shift. The salary for those who would like to work this shift would be $______ per hour.

Standard Text: 

Correct Answer: $21.78

Rationale : A 20 percent shift differential for a salary of $18.15 is $3.63 ($18.15 0.20). Adding $3.63 to $18.15 arrives at a salary of $21.78.

Global Rationale: 

Cognitive Level: Analyzing

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.

Question 20

Type: MCSA

Every month the chief financial officer (CFO) reviews the budget with the hospitals 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

Correct Answer: 2

Rationale 1: An MRI machine would be revenue producing.

Rationale 2: A capital expense is an expense that is above a set dollar amount such as $10,000 and that must be approved by the board of directors.

Rationale 3: The cost of this machine is not variable.

Rationale 4: Allocation of funds is not specific to the type of budgetary expenditure.

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: 14-2: 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 units 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

Correct Answer: 3

Rationale 1: Increasing the number of staff will not affect efficiency.

Rationale 2: Limiting the amount of supplies will decrease efficiency because of the time factor involved in obtaining needed supplies.

Rationale 3: When the cost of each item is displayed, staff becomes more aware of costs and may use supplies more wisely.

Rationale 4: Eliminating staff education will not increase efficiency and may ultimately decrease efficiency.

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: 14-5: Describe how staff affect budgetary performance.

Question 22

Type: MCMA

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.

Standard Text: Select all that apply.

1. The average daily census for the facility over the last year

2. Current community wage ranges for employee classifications

3. Changes in accrediting body or legislative regulations

4. Number of nurses terminated for cause over the last year

5. Current staff mix across the hospital

Correct Answer: 1,2,3,5

Rationale 1: Average daily census will be valuable information in developing this years budget.

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: 

Correct Answer: 339,150

Rationale : To figure the cost of water for the coming year, take this years cost and multiply it by the inflation factor plus 1.0. In this instance $225,000 1.19 = $339,150.

Global Rationale: 

Cognitive Level: Analyzing

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 hospitals 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?

1. The equipment is jointly owned by all units that use it.

2. If clients on the managers unit require the use of this equipment, a portion of the cost will be charged to the unit.

3. The equipment will be rented to the units for use.

4. The nurse manager will ask physicians to refrain from using the equipment.

Correct Answer: 2

Rationale 1: The equipment is owned by the hospital.

Rationale 2: The cost of the equipment will be spread out among the budgets of all the units whose clients require its use.

Rationale 3: The equipment is not rented to the units for use, but the unit must share in the cost to use the equipment.

Rationale 4: It is not appropriate for the nurse to attempt to influence care based upon having to pay for equipment.

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: 14-3: Demonstrate how to monitor and control budgetary performance.

Question 25

Type: MCSA

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?

1. The equipment was not approved by the mangers supervisor.

2. The budgetary cycle takes up to 1 year to occur.

3. The hospital has experienced a downturn in revenue and it not fulfilling promises.

4. The nurse manager failed to complete the correct request.

Correct Answer: 2

Rationale 1: There is no indication that the request was not approved, just that it has not yet been filled.

Rationale 2: The budgetary cycle of a large organization typically takes about 1 year to be completed. If the new manager sent in a request for the next budget, it may be 1218 months before the equipment arrives.

Rationale 3: There is no indication that the hospital is not fulfilling budgetary promises, just that the request has not yet been filled.

Rationale 4: There is no indication that the manager made an error, just that the request has not yet been filled.

Global Rationale: 

Cognitive Level: Applying

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 26

Type: MCSA

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?

1. It will help the manager create the budget for the next year.

2. It is required by The Joint Commission.

3. All variances must be documented and forwarded to the hospital attorney.

4. It ensures that there is no question of diversion of hospital funds.

Correct Answer: 1

Rationale 1: Keeping notes regarding variances is a key way of preparing for the next budget cycle.

Rationale 2: This is not a Joint Commission requirement.

Rationale 3: A budgetary variance is not the same as a client care variance.

Rationale 4: These notes are not kept as evidence disputing diversion of hospital funds.

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: 14-4: Explain how to determine a budget variance.

Question 27

Type: FIB

A nurse manager has received the following e-mail from the finance department: Your units budget for travel is $1,500 for the fiscal year. The units actual expenditures have been $2,120. The unit is over budget by _____ percent.

Standard Text: Round to the nearest hundredth percent.

Correct Answer: 41

Rationale : To figure the percent over budget, subtract the budgeted amount ($1,500) from the actual expenditure ($2,120). Divide the result by the budgeted amount ($1,500) and multiply by 100.

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: 14-4: Explain how to determine budget variance.

Question 28

Type: MCMA

An unfavorable rate variance has occurred in the salary budget of a unit. When investigating this variance, the nurse manager should look for which situations?

Note: Credit will be given only if all correct choices and no incorrect choices are selected.

Standard Text: Select all that apply.

1. Were any unexpected bonuses awarded?

2. Did agency personnel hours exceed the number predicted in the budget?

3. Were new employees hired at lower wages?

4. Did the number of client days exceed the predicted budgeted amount?

5. Were fewer nursing hours worked than were predicted?

Correct Answer: 1,2

Rationale 1: An expected bonus that was not budgeted could result in an unfavorable rate variance.

Rationale 2: Agency personnel hours are higher than hospital employee hours. If the number of hours exceeded the budgeted amount, an unfavorable rate variance would occur.

Rationale 3: If new employees are hired at work hours at a lower rate than that of other employees, a favorable rate variance would occur.

Rationale 4: Client day variations result in volume variances, not rate variances.

Rationale 5: Fewer nursing hours worked would result in an efficiency variance, not a rate variance.

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 29

Type: MCMA

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.

Standard Text: Select all that apply.

1. The FTE factor for an LPN hired this month

2. The current wage range for RNs working on the units

3. The names of all unit clerks working in the unit

4. The level of licensure of a nurse working on the unit

5. The fact that two RNs have retired this year

Correct Answer: 1,3,4,5

Rationale 1: The position control sheet includes the names and FTE factors for each individual employed by the unit.

Rationale 2: Wage ranges are not included in this information.

Rationale 3: The names of all unit employees are part of the position control sheet.

Rationale 4: The position control sheet categorizes those working on the unit by position. Therefore, the licensure level of the nurse would be indicated.

Rationale 5: Resignations are recorded on this sheet.

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: 14-4: Explain how to determine budget variance.

Question 30

Type: MCSA

A nursing assistant tells a nurse, I am going to have to call in sick tomorrow because I dont have a babysitter. How should the nurse respond to this information?

1. The assistants sick time is earned and should be used in any way the assistant wishes.

2. The assistant should use personal time, not sick time for this situation.

3. The assistants absence will not be a major problem for the unit as long as only one day is missed.

4. It will be okay for the assistant to miss a day because it will help another assistant get overtime wages.

Correct Answer: 2

Rationale 1: Misuse of sick time has a negative impact on the units finances and perhaps on the quality of care provided.

Rationale 2: Most facilities award personal days that should be used for situations such as this.

Rationale 3: The nurse does not know how much impact the assistants absence will have on the unit.

Rationale 4: It may be helpful for the assistant to get overtime wages, but it is not for the good of the unit.

Global Rationale: 

Cognitive Level: Applying

Client Need: Safe Effective Care Environment

Client Need Sub: Management of Care

Nursing/Integrated Concepts: Nursing Process: Evaluation

Learning Outcome: 14-5: Describe how staff affect budgetary performance.

Sullivan, Effective Leadership and Management, 8/e Test Bank

Copyright 2013 by Pearson Education, Inc.

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