UNIT 11: FINANCIAL MANAGEMENT Flashcards
Cost of Equipment - Salvage Value
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Life Expectancy of Equipment
Straight Line Depreciation
Purchase Price of Equipment
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Annual Income Generated by Equipment
Payback Period
Consulted by lab personnel to provide the indirect (or overhead) expense
Fiscal personnel
Materials
Supplies
Personnel time (salaries)
Utitlities
Laboratory and institutional administrative expenses
Buidling depreciation
Janitoral services
Direct Costs
Not directly accountable to a cost object; may be fixed or variable
Indirect costs
Constant overtime regardless of volume of determinations
Fixed costs
Depreciations
Supervisor salaries
Rental charges
Taxes
Fixed costs
Costs which will vary in a relationship to the volume of determinations
Items such as supplies and reagents
Variable costs
Associated with physical assets, equipments, instruments that have a life span of more than 1 year and often depreciated over a 5 year period or costs more than a set amount
Capital costs
Capital costs are associated with equipment that have a life span of more than ____ year and depreciated over a ____-year period
1 year, 5-year period
Costs used for day-to-day operations
General costs of doing business
Operating costs
May also refer to costs to produce test results
Operating costs
Operating costs include d ____ and i ____ costs
Direct and Indirect
Related to all components associated with performing the test
Direct costs
Not directly contributing to producing the test
Indirect costs
Overhead, administrative, and other expenses shared by many components in the lab
Indirect costs
Expenses that do not fluctuate when the volume of work changes on a daily basis
Fixed costs
Responds directly to any change in workload, and will vary in relationship with the volume of tests
Variable costs
Reagents
Supplies
Labor costs (in cases of overtime)
Some overheads
Variable costs
A tool to determine the efficiency of management and to calculate the break-even point so the manager can set the charges that appropriately cover the costs as well as plan policy for future laboratory services
Cost-revenue analysis
Cost of all supplies used
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Number of reportable tests performed
Cost per Billable Test (cost/test)
Total Revenue
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Total number of tests reported
Revenue per Test
Revenue per Test - Cost per Test
Proft per Test
Planning the procurement
Utilization of funds
Financial Management
Controlling the financial operation to assure effective utilization of funds
Financial Management
Setting of financial goals
Financial Planning
The determination of future financial requirements
Financial Planning
Systematic programming of organizational activities based on their costs and on the amount of resources available
Budget
A template for forecasting revenue and expenses for an organization
Budget
2 kinds of budget
Master Budget
Detailed Budget
Ongoing process that culminates annually with the expense projections for the coming year
Laboratory Budgeting
Forecasts are made in accordance with
Chart of accounts
Laboratory budgeting is divided into?
Quarters
Divided into income and expenses
Budget
Personnel costs amount to about how many % of total expenses?
60-70%
Patient days
Services rendered per patient day
Income/Revenue
Chart of Accounts (15)
Salaries
Supplies
Equipment
Reference laboratory fees
Continuing education travel
Subscription and dues
Hospital administrative assistance
Telephone
Housekeeping
General maintenance
Electricity
Building depreciation
Taxes
Insurance
Miscellaneous
Chart of Accounts
General liability
Workman’s compensation
Group health
Insurance
Financial Accounting Statements
Statement of financial position
Shows the lab’s financial situation at a given point in time
Balance Sheet
Financial Accounting Statements (3)
Balance Sheet
Income Statement
Statement of Cash Flow
Financial Accounting Statements
Contains the assets (cash, receivables, property, equipment, inventory)
Balance Sheet
Financial Accounting Statements
Shows the revenue generated and expenses incurred over a period of time
Income Statement
Financial Accounting Statements
Shows the inflow and outflow of cash
Operations, Investments, Financing
Statement of Cash Flow
Tools for Fiscal Decision Making (3)
Laboratory workload reporting
Depreciation/Payback period
Cost finding/Cost-Revenue Analysis
Average range of workload productivity in most laboratories
30-55 workload units per hour
Trainings
Lunch/Break
Meetings
Operational Needs
Calibration
Control
Maintenance
Stocking of supplies
Answer phone calls
Indirect Effort
Total workload units/Hour
Productivity units (units/hr)
Total fixed cost of the laboratory /
Revenue per test - Variable cost per test
Break Even Analysis (Test Volume)
Total fixed cost of the laboratory
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(Revenue per test - Variable cost per test) / Revenue per test
Break Even Analysis (Revenue)
