UNIT 11: FINANCIAL MANAGEMENT

Question 1

Cost of Equipment - Salvage Value
/
Life Expectancy of Equipment

Answer 1

Straight Line Depreciation

Question 2

Purchase Price of Equipment
/
Annual Income Generated by Equipment

Answer 2

Payback Period

Question 3

Consulted by lab personnel to provide the indirect (or overhead) expense

Answer 3

Fiscal personnel

Question 4

Materials
Supplies
Personnel time (salaries)
Utitlities
Laboratory and institutional administrative expenses
Buidling depreciation
Janitoral services

Answer 4

Direct Costs

Question 5

Not directly accountable to a cost object; may be fixed or variable

Answer 5

Indirect costs

Question 6

Constant overtime regardless of volume of determinations

Answer 6

Fixed costs

Question 7

Depreciations
Supervisor salaries
Rental charges
Taxes

Answer 7

Fixed costs

Question 8

Costs which will vary in a relationship to the volume of determinations

Items such as supplies and reagents

Answer 8

Variable costs

Question 9

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

Answer 9

Capital costs

Question 10

Capital costs are associated with equipment that have a life span of more than ____ year and depreciated over a ____-year period

Answer 10

1 year, 5-year period

Question 11

Costs used for day-to-day operations
General costs of doing business

Answer 11

Operating costs

Question 12

May also refer to costs to produce test results

Answer 12

Operating costs

Question 13

Operating costs include d ____ and i ____ costs

Answer 13

Direct and Indirect

Question 14

Related to all components associated with performing the test

Answer 14

Direct costs

Question 15

Not directly contributing to producing the test

Answer 15

Indirect costs

Question 16

Overhead, administrative, and other expenses shared by many components in the lab

Answer 16

Indirect costs

Question 17

Expenses that do not fluctuate when the volume of work changes on a daily basis

Answer 17

Fixed costs

Question 18

Responds directly to any change in workload, and will vary in relationship with the volume of tests

Answer 18

Variable costs

Question 19

Reagents
Supplies
Labor costs (in cases of overtime)
Some overheads

Answer 19

Variable costs

Question 20

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

Answer 20

Cost-revenue analysis

Question 21

Cost of all supplies used
/
Number of reportable tests performed

Answer 21

Cost per Billable Test (cost/test)

Question 22

Total Revenue
/
Total number of tests reported

Answer 22

Revenue per Test

Question 23

Revenue per Test - Cost per Test

Answer 23

Proft per Test

Question 24

Planning the procurement
Utilization of funds

Answer 24

Financial Management

Question 25

Controlling the financial operation to assure effective utilization of funds

Answer 25

Financial Management

Question 26

Setting of **financial goals**

Answer 26

Financial Planning

Question 27

The determination of **future** financial requirements

Answer 27

Financial Planning

Question 28

**Systematic programming** of organizational activities based on their costs and on the amount of resources available

Answer 28

Budget

Question 29

A **template** for **forecasting** revenue and expenses for an organization

Answer 29

Budget

Question 30

2 kinds of budget

Answer 30

Master Budget Detailed Budget

Question 31

Ongoing process that **culminates annually** with the **expense projections** for the coming year

Answer 31

Laboratory Budgeting

Question 32

**Forecasts** are made in accordance with

Answer 32

Chart of accounts

Question 33

**Laboratory budgeting** is divided into?

Answer 33

Quarters

Question 34

Divided into **income** and **expenses**

Answer 34

Budget

Question 35

**Personnel costs** amount to about how many % of total expenses?

Answer 35

60-70%

Question 36

Patient days Services rendered per patient day

Answer 36

Income/Revenue

Question 37

Chart of Accounts (15)

Answer 37

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

Question 38

# Chart of Accounts General liability Workman's compensation Group health

Answer 38

Insurance

Question 39

# Financial Accounting Statements Statement of **financial position** Shows the lab's **financial situation** at a given point in time

Answer 39

Balance Sheet

Question 40

Financial Accounting Statements (3)

Answer 40

Balance Sheet Income Statement Statement of Cash Flow

Question 41

# Financial Accounting Statements Contains the **assets** (cash, receivables, property, equipment, inventory)

Answer 41

Balance Sheet

Question 42

# Financial Accounting Statements Shows the revenue generated and expenses incurred over a period of time

Answer 42

Income Statement

Question 43

# Financial Accounting Statements Shows the **inflow** and **outflow** of cash | Operations, Investments, Financing

Answer 43

Statement of Cash Flow

Question 44

Tools for Fiscal Decision Making (3)

Answer 44

Laboratory workload reporting Depreciation/Payback period Cost finding/Cost-Revenue Analysis

Question 45

Average range of workload productivity in most laboratories

Answer 45

30-55 workload units per hour

Question 46

Trainings Lunch/Break Meetings

Answer 46

Operational Needs

Question 47

Calibration Control Maintenance Stocking of supplies Answer phone calls

Answer 47

Indirect Effort

Question 48

Total workload units/Hour

Answer 48

Productivity units (units/hr)

Question 49

**Total fixed cost** of the laboratory / **Revenue** per test - **Variable cost** per test

Answer 49

Break Even Analysis **(Test Volume)**

Question 50

Total fixed cost of the laboratory / (Revenue per test - Variable cost per test) / Revenue per test

Answer 50

Break Even Analysis **(Revenue)**