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.