AFDM workshop: Budgeting
Question 1: solutions
|Patient turnover (per bed)||4||3.2||5.4|
|FTE staff per bed||0.42||0.40||0.30|
|FTE staff per patient||0.10||0.13||0.06|
|Variable cost per bed||£4,833||£6,600||£4,900|
|Vairable cost per patient||£1,208||£2,063||£907|
|Fixed costs per bed||£7,083||£6,700||£4,400|
|Fixed cost per patient||£1,771||£2,094||£815|
1. Allocation of general overhead costs – better per bed or per patient?
2. In evaluating performance, look only at those costs which are controllable – variable costs?
3. When comparing costs, consider the issue of differing size of each ward: does ward 3 benefit
from economies of scale?
4. Do any of the wards offer specialist or more intensive care which is more expensive?
5. Ward 2 has the lowest bed turnover and highest costs – specialist/longer-term care?
Question 2: solutions
The sources of information can be classified into two main groups: internal sources of information
and external sources of information.
Internal sources of information will include:
1. The organisation’s short-term and long-term plans;
2. Previous year’s actual results;
3. Operational changes from previous year;
4. Staff training requirement;
5. Capital expenditure plans and any non-current asset requirements, etc.
External sources of information will include:
1. An analysis of the firm’s economic environment, including market trends and the activities of
2. Estimations of inflation;
3. Forecasts of exchange-rate movements for overseas sales and purchases;
4. Supplier’s price changes, etc.
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