Explain the role of variance analysis in maintaining an operating budget

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2010 Operating Budget.

Review the 2009 Budget Issues – Nurses file.

Decide which of the two highlighted options you will implement from the Nursing Statistics memo of the 2009 Budget Issues – Nurses document.

Discuss decision-making processes in creating a budget.

Create a new 2010 Operating Budget based on the labor decision you select from the Nursing Statistics memo.

Part 2: Analysis Paper

Write a 1,050- to 1,400-word paper. Your paper should:

• 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.

• 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.

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