See separate attachment – CHAPTER 31 Mini-Case Study 3: Technology in Health Care: Automating Admissions Processes* Eric Christ
Required
1. Create a budget for the next fiscal year. Set out the details of all assumptions you needed in order to build this budget.
2. Use the “Checklist for Building a Budget” (Exhibit 15–2 – see below) and critique your own budget.
Exhibit 15–2 Checklist for Building a Budget
• 1. What is the proposed volume for the new budget period?
• 2. What is the appropriate inflow (revenues) and outflow (cost of services delivered) relationship?
• 3. What will the appropriate dollar cost be? (Note: this question requires a series of assumptions about the nature of the operation for the new budget period.)
• 3a. Forecast service-related workload.
• 3b. Forecast non-service-related workload.
• 3c. Forecast special project workload if applicable.
• 3d. Coordinate assumptions for proportionate share of interdepartmental projects.
• 4. Will additional resources be available?
• 5. Will this budget accomplish the appropriate managerial objectives for the organization?
Assignment Exercise 15–2: Budgeting
Find an existing budget from a published source. Detail should be extensive enough to present a challenge.
Required
• 1. Using the existing budget, create a new budget for the next fiscal year. Set out the details of all the assumptions you needed in order to build this budget.
• 2. Use the “Checklist for Building a Budget” (Exhibit 15–2 – shown above) and critique your own effort.
• 3. Use the “Checklist for Reviewing a Budget” (Exhibit 15–3 – see below) and critique the existing budget.
Exhibit 15–3 Checklist for Reviewing a Budget
• 1. Is this budget static (not adjusted for volume) or flexible (adjusted for volume during the year)?
• 2. Are the figures designated as fixed or variable?
• 3. Is the budget for a defined unit of authority?
• 4. Are the line items within the budget all expenses (and revenues, if applicable) that are controllable by the manager?
• 5. Is the format of the budget comparable with that of previous periods so that several reports over time can be compared if so desired?
• 6. Are actual and budget for the same period?
• 7. Are the figures annualized?
• 8. Test one line-item calculation. Is the math for the dollar difference computed correctly? Is the percentage properly computed based on a percentage of the budget figure?
Assignment Exercise 15–3: Transactions Outside the Operating Budget
Review Figure 15–2 (see below) and the accompanying text.
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