Write a 1,050- to 1,400-word paper in which you address the following: Discuss d

Question

Write a 1,050- to 1,400-word paper in which you address the following:

Discuss decision-making processes in creating a budget.

Explain the role of variance analysis in maintaining an operating budget.

Differentiate between managerial accounting and financial management.

Explain generally accepted accounting principles applied to the health care industry and how they are applied to your Operating Budget Projection.

Discuss the decision between the two labor alternatives facing the management of PFCH and the annual cost increase of each.

1. Increase in cost per month due to a $1 raise per nursing hour Jan $ 63,702.62 Feb $ 57,517.73 Mar $ 58,973.00 Apr $ 48,820.77 May $ 43,640.71 Jun $ 34,839.80 Jul $ 35,013.05

Aug $ 51,471.44 Sep $ 53,671.66 Oct $ 55,715.97 Nov $ 64,412.93 Dec $ 62,940.33 Total $ 630,720.01

2. Increase in cost per month due to a change in nursing ratio from 5 to 1 down to 4 to 1 Jan $ 477,770 Feb $ 431,383 Mar $ 442,297 Apr $ 366,156 May $ 327,305 Jun $ 261,299

Jul $ 262,598 Aug $ 386,036 Sep $ 402,537 Oct $ 417,870 Nov $ 483,097 Dec $ 472,052 Total $ 4,730,400

Make a recommendation about which labor alternative should be chosen.

Justify and analyze the labor decision that you recommend. Your justification should present numbers related to fiscal management including how each decision affects the 2010 Budget Projection.

Analyze the effect of your decision on the operating budget, including:

The opportunity cost of your recommendation

How your recommendation affects employee satisfaction

How your recommendation affects patient care and patient satisfaction

Cite a minimum of 4 sources.

Explanation / Answer

Decision making process is the most critical process in the organisation.There are few steps which are followed in all the organisations which are as follows

1) Create the decision making model--This step is the foundation stone of the decision making model. It helps in deciding whether the model would be feasible in the acheivement of the goals of the organisation and whether would it help in the effective decision making process.

2)What is the available amount for the budget-This step decides the budget amount.This especially includes the emergency expenditures which would cover the must have pending decisions.

3) Does the spending line up with the business goals--This criteria is the most important part where in it states the comparison between the spending amount and the business goals .These two should meet as it often affects the business poorly if this does not happen

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