Recent orders
Types of business costs
Context Pages
Task 1 3-5
Task 2 6-8
References 9-9
Task 1
Types of business costs
Business costs can be classified as fixed and variable, or direct and indirect costs based on operation
Fixed costs – these are costs which remain the same and cannot be adjusted. The control for fixed costs is determined by the business requirements for effective operation. These include loans salaries, insurance among others, normally determined by the organizational requirements and existing regulations. Fixed costs are controlled during budgeting by ensuring allocation of enough funds to essential operational functions. The budget for these costs provides the controlling element.
Variable costs – these refer to those costs which remain proportional to the volume of business experienced. These include materials utilized in running the business like medicine administered to patients. These costs are controlled through ensuring utilization only for income generating activities within organizations. The variable costs mainly occur within the operations because they resulting from operating requirements arising as business continue with operations (McLaney & Atrill, 2012).
Financial Resource Management
Financial resource management requires relevant information to be made available to the management authorities. The management should be able to establish the financial resources available for use, towards a specified application or operation (Brayley & McLean, 2008). This enables the management to adopt a budget for various resource-consuming operations within an organization. The source of the resources also remains important in management of financial resources. The financing source might have a proposal on how the resources provided should be utilized. Financial resources acquired through loans also need to be paid. Having source information could enable the management to establish the best methods for utilizing the provided resources, to ensure return on investment, in the case of borrowed financial resources.
Regulatory Requirements
The financial management within the healthcare system is commonly regulated for efficiency and effectiveness. This regulation varies within the industry, depending on the classification of the healthcare facility. Public and private healthcare facilities have different regulations imposed on them from the financing sources. Government departments in-charge of healthcare system regulates spending within various government hospitals. Public hospitals are normally provided with guidelines on their expenditure from the funding source and provide subsidized services because of government funding assistance. Within the private healthcare facilities, financial management becomes regulated by different requirements. These organizations should operate and ensure profitable returns, to the investors. The major regulating aspect of finances within these organizations remains the capacity for the establishment to operate profitably.
The case of Norfolk and Norwich University Hospital (NNUH)
This healthcare facility operates in the National Health Service, NHS and also has a private wing. Being jointly owned by private and public organization, the hospital’s financial management functions are effectively handled by numerous stakeholders. Budgeting for the establishment’s operation is undertaken by the management of the hospital seeking to ensure generation of enough financial resources to sustain the operations. The budget includes a percentage of income generated from the hospital private wing and financial resources form NHS. The healthcare facility is expected to generate profits which could be utilized in paying for the PFI financing used for construction of the hospital. Financial accountability for the hospital is executed through parliamentary Public Accounts Committee, because the hospital receives public finances from NHS. Other than the PAC, the National Audit Office also conducts audit of the hospital to ensure accountability and efficiency in financial management.
Task 2
Sources of income in healthcare
Within the healthcare and social system income is normally generated from two major sources. The sources of income normally vary depending on healthcare facility ownership. The primary source of income for public hospitals remains external funding. This normally occurs through various non-governmental organizations and government’s budgetary allocation. These institutions receive higher percentage of financing from government, and other government related organizations. Public healthcare facilities in England, for example, are financed through the NHS. Private hospitals generate their income from services offered to patients. These hospitals normally operate with profit targets, which ensure the hospital can maintain itself through income generation. The hospitals offer highly priced services to generate enough financial resources for covering various operating costs. The owner of these hospitals can also fund the facilities through equity financing, from private funds.
Factors influencing financial resource availability
Following availability of income within various healthcare organizations, the availability of financial resources in healthcare facilities is affected mainly by several factors. Within the public and private sector, healthcare facilities operate within stipulated budgetary allocations. Within the public sector, the budgets allocated to various hospitals determine the amount of financial resources available. Public hospitals are required to stick to the budgets because of the accountability to external audit and other government bodies. Once budgets have been released by government, changes cannot be included and this affects availability of financial resource. Within the private sector, other than the budget, operating costs are financed through sales generated. The sales volume in these hospitals, therefore, presents a significant impact on availability of financial resources.
Budget expenditures within healthcare
The healthcare budgets contain different expenditure which can be characterized as follows
Hospital care- this refers to the hospitalization of patient within hospitals. Expenditures include provision of beds and other services required by admitted patient. This function constitutes a large percentage of the total budgetary allocation.
Clinical services – these refer to specialized services offered by professionals within hospitals like physiotherapy, dental services among many others
Health insurance – this refers to the financial costs covered by hospitals and other healthcare facilities on behalf of the people seeking healthcare services
Drugs – the purchase of drugs administered to patients also falls among the major expenditures within the healthcare sector.
There are other services offered within the healthcare sector which also constitute a significant percentage of allocation within the budget. These include home care, ambulance services, administration, investments and miscellaneous expenses.
Factors contributing to budget expenditure decision making
The individuals involved in decision-making within the health sector consider various factors when making expenditure allocation to the various issues. The importance attached to various expenditure elements is considered when deciding on the amount to allocate (Brayley & McLean, 2008). Within the various government and public healthcare facilities, government policies remain the guiding principles in budgeting. Importance is attached to prevailing policies concerned with budgeting in public hospitals. Private hospitals, however, have different focus when making budgeting decisions. The element of profitability remains important and decisions normally follow the expected returns when deciding on expenditure. The most profitable elements might be given priority over others, deemed less profitable to the organization.
References
Brayley, E. & McLean, D. (2008). Financial Resource Management. Illinois: Sagamore publishing.
McLaney, E. & Atrill, P. (2012). Accounting: An Introduction. NY: Pearson Pub.
Need to specify different task such as 1.1, 1.2 and so on
Harvard referencing is needed
Task 2 not well explained
Overall assignment looks fine
Introduction and self evaluation is required
Need some more research
Types Of Budget
Types Of Budget
The type of budget presented by St. Paul Family Learning Center, Minnesota is a flexible budget that represents different working figures depended on the number of students that the school is contemplating to work with during the anticipated learning period. The fact that the budget explores various levels of operation in deliberating the amount of expenditure to be incurred under the period in consideration is the representation of the flexibility exhibited in the figures. A flexible budget is adjustable to a number of operation levels in order to make it representational of the actual operation level (Edwards Hermanson and Invacevich, 2007).
Reimbursements and Expenditure
From the budgeted figures, each student will have revenue apportioned at USD 5996 at the 60-operation student level, which attracts expenses at USD 6963 for the same level. This implies that at this level, there will be no reimbursement USD (5996-6963= -967) but fees payable totaling to USD 967 per student. At the 100 students-operation level, revenues per student totals to USD 5830 and expenditure totaling to USD 5061 which gives reimbursements of USD (5830-5061=769). On the final level of operation for 120 students, revenues per student amount to USD 5667 while expenditure per student amounts to USD 4804 giving reimbursements of USD (5667-4804=863).
Highest Expense Categories
Among the highest expense categories across the operation levels are development and recurrent elements of the school’s operation. For instance, the building lease attracts a fixed expense of over USD 102,000 while salaries account for USD 218,331; 180,630 and 180,623 for student operation levels of 120, 100 and 60 respectively. This illustrates the implication of higher operation levels on the actual expenses, while also gives an account of the revenue generating capacity of a higher level of operation.
Expenses
Nearly all the expense categories appear logical for inclusion in a school budget. However, there are some scrutiny issues that can raise issues on their validity. Some of the expenses included in the budget are seemingly not necessary such as field trips for students which for instance stand at USD 2640 at the 60 students-operating level, whose correction ought to give a lower figure at USD 2400 at USD 40 per student. The difference of in this figure is not justifiable which raises questions on the necessity of the entire expenditure.
Viability and Break Even Analysis
Apparently, operations at the current budget for the 60 students-operation level are not viable and needs consideration and readjustment. The break even analysis would be achieved if the school management can fix its expenditure at the exact revenue level. This implies that the operations are streamlined for expenditure projections not to exceed, neither less than the available revenue. This implies that the expenditure for all the operation levels are fixed at USD 395,715; 583,000 and 680,063 for 60, 100 and 120 students operating levels respectively.
Benefits of the Budget
The budget enables the management to control operations within the limits that the revenues can support as well as offer operation guidelines. Budget making involves various departments which also act in coordination of activities in an organization.
Uses of the Budget
The budget is used as the financial guide in departmental involvement with expenditure items. It is therefore used in the management engagement with financial aspect and sustainability of the organization.
Part II
Variance Analysis: Advantages and Disadvantages
Advantages
i) Detection of favorable and unfavorable operation activities assists in control.
ii) Assist in determination of flexibility limits for costs.
iii) Assists in setting of internal control standards at the departmental level in terms of finance.
iv) Variance analysis assists in achieving congruence of goals thereby reducing suboptimality.
Disadvantages
i) Variance analysis depends on the setting of standards which could be incorrect.
ii) Standard setting affects employees’ performance if the implementation is not accurately done
iii) Temporal element means that the set standards are faced with obsolescence
iv) It is a time consuming activity and usually complicated (Brown, 1991).
Complementary and Alternative Performance Measures
An important modification of the intentions of variance analysis is the scorecard approach which targets different departments in terms of performance. The balanced scorecard approach formulates performance standards from which performance can be evaluated (Walter, 2011). In light of this operation, the mechanism of the variance analysis is maximized and extended to other departments and applications.
References
Brown, G. (1991) Cost and management accounting I. Lonodn, UK: ACCA
Edwards, J. D., Hermanson, R. H. & Invacevich, S. D. (2007) “Accounting Principles: A Business Perspective. First Global Text Edition, Volume 2 Managerial Accounting, 108-113, 128-134, 165-169 and 181-183.” Retrieved from: HYPERLINK “http://docs.globaltext.terry.uga.edu:8095/anonymous/webdav/Accounting%20Principles/Accounting%20Principles%20Vol.%202.pdf”http://docs.globaltext.terry.uga.edu:8095/anonymous/webdav/Accounting%20Principles/Accounting%20Principles%20Vol.%202.pdf
Walter, L. M. (2011) “HYPERLINK “http://www.principlesofaccounting.com/”Principles of Accounting: A Complete Online Text, Chapters 21 and 22,” Retrieved from HYPERLINK “http://www.principlesofaccounting.com/”http://www.principlesofaccounting.com/
Types of Anemia
Types of Anemia
Name
Institution
Types of Anemia
Anemia results when there are insufficient erythrocytes in the body to supply oxygen to the organs. Insufficient number of red blood cells results in low levels of hemoglobin, a protein rich in iron and helps the cells transport oxygen. Anemia is declared when the levels fall below 13.5 gram/100 ml and 12.0 gram/100 ml in men and women respectively (Terrie, 2013). There are several types of anemia that occur either through loss of blood, destruction, or reduced red bold cell synthesis as discussed below.
Iron-deficiency anemia – This type occurs when there is insufficient synthesis of erythrocytes by the body. It is the most common type and childbearing women are prone to this condition.
Pernicious anemia or Vitamin B-12 anemia – Vitamin B-12 is vital in the production of red blood cells by the body, and the intestine’s inability to absorb this vitamin results in pernicious anemia. Consumption of vitamin B-12 deficient foods is also a contributing factor.
Aplastic anemia – The bone marrow synthesizes red blood cells, and its destruction causes insufficient production. Physical and chemical factors such as X-rays and chemotherapy are contributing factors to bone marrow destruction. Low levels of red blood cells and autoimmune diseases cause this type of anemia.
Sickle Cell anemia – A hereditary anemic condition where the erythrocytes assume a sickle shape. The deformed cells undergo degradation faster than the healthy cells leading to an insufficient number of erythrocytes in the body causing anemia.
Trauma related anemia – This type of anemia occurs when the body loses a substantial amount of blood following an injury or accident. Hence, the body cannot supply oxygen to the organs because a large number of red blood cells have been lost through bleeding (Terrie, 2013).
Type of Anemia Causes Symptoms Diagnostic Tests Treatment
Iron-deficiency anemia Heavy menstruation
Insufficient iron in the diet
Bleeding caused by cancer, hemorrhoids, or ulcers
Malabsorption of iron in the body
Dizziness, shortness of breath, fatigue, malaise, paleness, and loss of concentration. Babies may experience fussiness, slow growth and development, and a short attention span. A physical examination involving medical history, complete blood count test and iron test to check the level of red blood cells and iron respectively. Taking iron supplement pills
Pernicious anemia Diet deficient in Vitamin B-12
Malabsorption of Vitamin B-12 by the small intestines
Palpitations, fatigue, dizziness, shortness of breath, chest and leg pains, headache, diarrhea, weight loss, red and sore mouth and tongue Analysis of a blood sample to determine B12 levels and intrinsic factor antibodies.
Schilling test to determine absorption of B12 from the bowel Vitamin B12 injections
Aplastic anemia Bone marrow destruction caused by viral infections, toxic chemicals, X-rays, radiation and chemotherapy, pregnancy, and autoimmune disorders. Headache, pale skin, fatigue, dizziness, bleeding gums, nose bleeding, irregular heartbeat, skin rash, and prolonged bleeding Bone marrow biopsy. A small bone marrow sample is removed from a large bone and checked under a microscope to measure the level of blood cells.
Blood tests to determine the level of blood cells. Blood transfusion, observation and medication for mild cases, and bone marrow transplants for severe cases.
Sickle cell anemia Inheritance of two sickle cell genes from parents Swollen feet and hands, delayed growth, crises or severe pains, vision problems, jaundice, and multiple infections Simple blood test to check for hemoglobin S, which causes this type of anemia Medication to relieve pain and prevent infections; supplemental oxygen; blood transfusion, and bone marrow transplants
Trauma related anemia Serious loss of blood through accidents or severe injuries Abdominal pains, pale skin, extreme nausea, rapid breathing, fatigue, malaise, severe dizziness, and chest pains. Blood tests and observation Control of bleeding, blood transfusion, and iron supplements.
Sickle cell anemia is the most difficult to treat. This is because patients require consecutive treatment to relieve pain and prevent infection. In case of transplantation, they rarely find suitable stem-cell donors (Terrie, 2013).
Reference
Terrie, Y. C. (2013). Understanding Anemia: Types, Symptoms and Treatment. US News. Retrieved on 14 Oct. 2013 from http://health.usnews.com/health-news/health-wellness/articles/2013/04/13/understanding-anemia-types-symptoms-and-treatment