Learning Module 6 – Mini Project # 3
Question # 1
Unified Path charity collects a fair share of everyone’s money at home and in the office and distributes it to a variety of individual charities. They would like to channel the money where it does the most good, so they require a performance budget from each individual charity. Care for the Homeless provides medical care, meals, and shelter to homeless individuals. The line item budget for Care for the Homeless is as follows:
| Salaries | $50,000 |
| Food | $20,000 |
| Rent | $8,000 |
| Transportation | $15,000 |
| Total | $93,000 |
Care for the Homeless expects to provide 15,000 meals, 6000 person-nights of shelter, and 4000 nurse practitioner physical examinations.
The top management of Care for the Homeless believes that 40% of all personnel effort goes into the preparation and provision of meals, 30% into the shelter program, and 30% into nurse practitioner efforts. The food goes entirely to the meals effort. The rent is divided 80% for shelter and 20% for clinic offices. Transportation is split equally between bringing the homeless in for food, shelter, and medical care.
Prepare a performance budget that shows the total cost of providing meals, shelter, and medical care, as well as the cost per meal, per night of shelter, and per examination. Use this table to complete the problem.
| Line Item Costs | Shelter % | Shelter $ | Meals % | Meals $ | Medical Care % | Medical Care $ | |
| Salaries | |||||||
| Food | |||||||
| Rent | |||||||
| Transportation | |||||||
| Total | |||||||
| Activity | Output Measures | Level of Service | Cost | Cost Per Unit |
| Meals | Meals | |||
| Shelter | Nights | |||
| Medical Care | Examinations |
Question # 2
Some organizations use control charts to determine when investigation of variances is needed. Control charts plot actual results against the budget, with a limit:
a. Above and below the budgeted amount
b. Above the budgeted amount
c. Below the budgeted amount
d. None of the above
Question # 3
Variance analysis results are used in conjunction with performance budget information. The budget projects a 5.0% reduction in errors with an expenditure of $22,000. Actual data show a 4.5% reduction in errors at a cost of $19,000. What is the volume variance, and is it favorable or unfavorable?
a. $800 favorable
b. $2200 favorable
c. $2200 unfavorable
d. $3000 favorable
e. $3000 unfavorable
Question # 4
The three primary approaches to benchmarking are:
a. Competitive, cooperative, and communicative.
b. Competitive, communicative, and collaborative.
c. Competitive, collaborative, and cooperative.
d. Competitive, collaborative, and consultative.
Question # 5
Which of the following is not one of the 10 steps listed in the benchmarking process?
a. Decide what to benchmark
b. Establish different benchmarks for different parts of the organization
c. Establish goals
d. Reestablish benchmarks as they change over time
Question # 6
A clinic has 6 nurse practitioners that see a total of 123 patients per 8-hour workday. If the standard productivity for a nurse practitioner in this setting is 2.4 patients per hour, what is the clinic’s productivity percentage?
a. 2.6%
b. 26%
c. 94%
d. 107%
Question # 7
In an effort to reduce costs, a clinic changes the staff mix but keeps the number of staff unchanged. As a result, the staff cost per day is reduced from $2000 to $1750. The new staff takes longer, on average, to serve each patient, and the number of patient visits each day drops from 96 to 84. Measures show no change in the quality of patient care. How does the post-change productivity compare with the pre-change productivity, on a unit cost ($ per patient visit) basis?
a. There has been no change in productivity
b. There has been an increase in productivity
c. There has been a decrease in productivity
d. It cannot be determined with this information
Question # 8
A nursing unit has 10 beds, but 2 beds are vacant because of insufficient numbers of nursing staff. The daily cost of providing nursing services to the 8 filled beds is $2000. The unit manager increases the number of staff, and this allows all 10 beds to be filled. As a result, the daily cost of providing nursing services to the 10 filled beds increases to $2400. Because of a change in staff mix when new nursing staff members are added, nursing hours per patient day (HPPD) increases from 4.0 to 4.5. Measures show no change in the quality of patient care. How does the new staffing pattern productivity compare with productivity in the original staffing plan on a unit cost ($ per patient day) basis?
a. There has been no change in productivity
b. There has been an increase in productivity
c. There has been a decrease in productivity
d. It cannot be determined with this information
