Submit your answers on a Word document, with the heading of Week 5 Assignment. For the questions requiring a written response, answer directly on the assignment and adhere to proper grammar and syntax, and provide references. For the questions requiring calculations, show all of your work and follow the format that has been provided for the calculations in the lesson for Week 5. In addition, further explanations and formulas on the break-even analysis are contained in the required reading resources. Key points for calculations When performing calculations, standard rounding rules apply. If the number to the right of the decimal is less than 0.5, round down to the nearest whole number, e.g., 33.4 = 33 If the number to the right of the decimal is 0.5 or greater, round up to the nearest whole number, e.g. 33.5 =34. Read the question carefully. Pay close attention to the units be asked and keep them consistent. For example, days vs months vs years; charges vs contribution margin; dollars vs percentage Provide ALL formulas with references. Designate which formula associates with which source. It is not sufficient to simply list the source at the beginning of the section. Write out the formula used BEFORE filling in the numbers. Formulas used should be taken from one of the required resources for this course.
Week 5: Break-even Analysis
Assignment Guidelineswith Scoring Rubric
Purpose
The purpose of this assignment is to:
To provide learners with the opportunity todevelop break-even-analysisskills.
Total Points Possible: 100
Requirements:
Answer the questions and complete the calculations required for the assignment.
Submit your answers on a Word document,with the heading of Week 5Assignment. For the questions requiring a written response, please adhere to proper grammar and syntax, and provide references. For the questions requiring calculations, show all your work and follow the format that has been provided for the calculations in the lesson for Week 5.
1. When performing calculations, standard rounding rules apply. If the number to the right of the decimal is less than 5, round down to the nearest whole number, e.g., 33.4 = 33 If the number to the right of the decimal is 5 or greater, round up to the nearest whole number, e.g. 33.5 =34.
2. Read the question carefully. Pay close attention to the units be asked and keep them consistent. For example, hours vs FTEs; days vs months vs years.
3. Provide ALL formulas with references. Designate which formula associates with which source. It is not sufficient to simply list the source at the beginning of the section. Write out the formula used BEFORE filling in the numbers.Formulas used should be taken from one of the required resources for this course.
Example: Total Contribution Margin (CM) = (CM) category 1 + CM cat 2 + CM 3
Leger, J.M. & Dunham-Taylor, J. (2018). Financial management for nurse managers: Merging the heart with the dollar, 4th Ed. Burlington, MA: Jones-Bartlett.
Preparing the paper
Break-Even Analysis Case Study
You and several of your colleague business partners have decided to establish an outpatient fertility clinic in your service area. All of you are very familiar with this patient population base, have completed an extensive market analysis thatdemonstrated a great need for the service, and are comfortable with setting up a business and the costs associated with this special group of patients.
As part of the business plan, you and your partners will need to convince stakeholders that this new service endeavor will be viable. They will want to know how many patients visits annually will need to occur and how long it will take for the service to be at least cost neutral or profitable. To provide them with this information you will perform a break-even analysis. Use the following data, conduct the analysis accounting for the contribution margin of each patient acuity category.
nurses and other staff salaries, specialty equipment, other miscellaneous)
Variable costs: $500/patient visit (specialty equipment, oxygen supplies, other
miscellaneous)
Clinic days: Monday-Saturday- 312 days/year
Projected patient visits per year: 7488
Patient charges by patient acuity category:
Simple (15%)————$2000/visit
Moderate (60%)——–$6500/visit
Complex (25%)———$10,000/visit
Break-even Analysis Data Table
Acuity Category
Percentage %
Charge per Visit
Visits per Year
Charges per Year
Visits per Day
Charges per Day
Contribution Margin
Simple
15%
$2000
Moderate
60%
$6500
Complex
25%
$10,000
Expected Total Daily Charges
ExpectedTotal Daily Revenue
Break Even point in days
Break Even point in visits
Describe your approach to this case study. In addition to the numbers given, what do you need to know before you can calculate the break-even analysis?
Perform the calculations needed for the break-even analysis. Show your work, formulas used, and reference the formula. When calculating the patient visits per day, round to the nearest whole. After you’ve completed the calculations, record your results in the appropriate place in the table.
How many patient visits are expected per day?
What is the contribution margin of each category of patient?
Based on the data and your calculations, what is the expected daily revenue?
How long (in days, months, or years) will it be before the return on investment begins?
How many patient visits will be required to reach the break-even point?
Discuss your analysis. Is the project viable and profitable service? Does the analysis support moving forward with the business? Cite specific data from you analysis to support your interpretation.
Approach to Break-even analysis is clearly articulated and contains elements needed to address the scenario
Calculate the number of patients/category served per year and day.
15
15%
Number of patients served by the fertility clinic is correctly calculated per year and day for each type/category. Formulas are correctly shown, used, and referenced. Calculations are shown
Calculate the contribution margin for each patient category
30
30%
For each of the three patient/categories the contribution margin is correctly calculated. Formulas are correctly shown, used, and referenced. Calculations are shown.
Calculate the number of days to break-even.
10
10%
Time to break-even in days is correctly calculated. Formulas are correctly shown, used, and referenced. Calculations are shown
Calculate the break-even quantity (number of visits).
15
15%
The break-even quantity (number of visits) is correctly calculated. Formulas are correctly shown, used, and referenced. Calculations are shown.
Analysis of break-even analysis
20
20%
Break-even analysis is clearly articulated. Includes elements potential for viability and profitability of service, recommendation for continuing the business. Specific data from the analysis is used to support your interpretation.
Writing conventions, format, and reference citations
5
5%
Writing is clear concise without grammatical and spelling errors. All references are correctly cited (if applicable) and written.
100
100
A quality assignment will meet or exceed all of the above requirements.
Grading Rubric
Assignment Criteria
Outstanding or highest level of performance
Very good or high level of performance
Competent or satisfactory level of performance
Poor or failing level of performance
Unsatisfactory level of performance
ContentPossible Points = 100 Points
Approach to Break-Even Analysis
5 Points
0 Points
Calculate the number of patients per category served at the fertility clinic per year and per day.
15 Points
10
5
0 Points
Number of patients served per year and per day is correctly calculated for each patient category served at the fertility clinic.
2/3 categories correctly calculated
1/3 of categories correctly calculated
All categories incorrectly calculated
Calculate the contribution margin for each type of patient served at the fertility clinic.
30 Points
20
10
0 Points
Contribution margin for all category types are correctly calculated
Contribution margin for 2/3 category types are correctly calculated
Contribution margin for 1/3 category types are correctly calculated
Contribution margins for all category types are incorrectly calculated
Calculate the number of days to break-even point.
15 Points
0 Points
Number of days to break-even is correct.
Number of days to break even is incorrect
Calculate the break-even quantity (number of visits)
10 Points
0 Points
Number of visits to break even is correct
Number of visits to break even is incorrect.
Analysis of break-even analysis
20 Points
15 Points
10 Points
5 Points
0 Points
Break-even analysis is clearly articulated. Includes elements potential for viability and profitability of service, recommendation for continuing the business. Specific data from the analysis is used to support your interpretation.
3/4 of all elements of break-even analysis are present and correct.
1/2 of all elements of break-even analysis are present and correct.
1/4 of all elements of break-even analysis is present and correct.
All elements of break-even analysis are missing or incorrect.
Writing conventions, format, references
5 Points
3 points
1 point
0 points
Writing is clear and concise, contains no grammatical and spelling errors. All references are correctly cited (if applicable) and written.
2/3 of elements are present and correct
1/3 of elements is present and correct
All elements of writing conventions are missing or incorrect.
This assignment provides learners with the opportunity to apply budgeting knowledge and skills by calculating full-time equivalents for a nursing unit, projecting FTE needs related to census changes, and analyzing a variance scenario.
Total Points Possible: 150
Requirements
Description of the Assignment
This assignment is in two scenario-based sections each related to staffing budgets. In the first, the student will perform multistep calculations of FTEs and projection of future FTE needs for a selected nursing unit. The second section involves calculation of budget variance and its analysis. Each section requires supported written interpretation of findings.
Criteria for Content
Answer the questions and complete the calculations required for the two sections of the assignment.
Key points related to Calculations:
1. When performing calculations, standard rounding rules apply. If the number to the right of the decimal is less than 5, round down to the nearest whole number, e.g., 33.4 = 33 If the number to the right of the decimal is 5 or greater, round up to the nearest whole number, e.g. 33.5 =34.
2. Read the question carefully. Pay close attention to the units be asked and keep them consistent. For example, hours vs FTEs; days vs months vs years.
3. Provide ALL formulas with references. Designate which formula associates with which source. It is not sufficient to simply list the source at the beginning of the section. Write out the formula used BEFORE filling in the numbers.
Rundio, A. (2022). The nurse manager’s guide to budgeting and finance(3rd ed.).Sigma Theta Tau International.
Section One: Staffing Budget and FTEs
Calculations of full-time equivalents (FTEs)
Project FTE needs related to census changes
Section Two: Variance Analysis
Calculating variance
Variance analysis with explanation
Download the Assignment Word Document and submit your answers directly onto the form. When completed, upload into the assignment portal in your course. For the questions requiring a written response, please adhere to proper grammar and syntax, and provide references. For the questions requiring calculations, show all your work including the formula used. Include the references for formula chosen.
Preparing the Assignment
Section One—Staffing Budget and FTEs
Personnel Budget Case Study
Sandra Chambers has recently accepted the position of assistant administrator for the department of nursing at Potter Regional Medical Center where she will oversee the operations of five medical units. As she evaluates the budgets for the different cost centers, she finds that all are being used at near or full capacity. The activity in four of the five has remained steady over the past 2 years. A fifth unit has realized a steady increase in patient volume during that time and is currently at 88% capacity. It has been projected that within the next 12 months the volume of patients moving through that unit will increase by 20%. Sandra needs to determine if the current FTEs for the unit will be sufficient to ensure quality and safe care continues to be provided, and if not, what is the number of FTEs that will be needed to cover a 20% increase in volume.
Suggest all the information Sandra needs to collect in order to project the FTEs needed for the next fiscal year accounting for the projected increased capacity. Remember, she is new to her position so be sure to include background data on the unit itself as it relates to previous budgets, nursing staff, and the organization. In other words, summarize your approach to this Case Study.
Sandra has collected the following census information on all five units for the last month, in
addition to what was asked in question number one. Calculate the ADC and Occupancy Rate for each unit using the Daily Census/Occupancy Rate table to determine which unit is currently at 88% occupancy rate and projected to increase over the next year.
Unit
Beds
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
Total Patient Days
A
35
31
30
31
30
29
30
31
30
31
29
29
32
31
33
31
31
33
34
34
34
34
32
30
32
31
30
30
33
31
34
0
941
B
15
15
14
11
9
7
12
12
15
13
13
16
15
15
15
16
16
15
14
15
16
15
13
13
17
16
15
16
16
14
15
0
424
C
13
10
12
11
11
11
13
13
13
12
13
12
12
12
13
13
13
13
13
13
13
13
13
13
12
12
12
12
13
13
13
0
372
D
32
30
27
27
24
26
23
27
29
28
28
25
27
30
26
31
31
30
30
30
32
32
32
26
25
25
25
23
31
31
30
0
841
E
6
6
3
3
3
3
5
5
5
2
2
2
2
4
4
3
3
0
0
0
6
5
5
3
3
3
2
5
4
3
3
0
97
(adapted from…..Healthcare Financial Management Association (2012). Managing fiscal resources: A budget and productivity case study. Retrieved from hfmamd.org
Average Daily Census/Occupancy Rate
Unit
ADC
Occupancy (%)
A
B
C
D
E
The Unit with an 88% occupancy rate is _____.
3. Using data contained in the first questions, complete the table below and determine the Average Length of Stay (ALOS) for the following three units. Show your work.
Unit
# Beds
Patient Days
# Discharges
Average Length of Stay (ALOS)
A
110
C
96
D
85
What is the ALOS for the unit you identified earlier at an 88% occupancy rate? _____
You have determined the Unit for which Sandra must make FTE projections. For the remaining questions in this section, refer to the figures used and or obtained related to the Unit identified in Question 1.
Additional information includes
the budgeted hours of care per patient day (HPPD-budgeted) is 8.8; and
each employee receives 300 paid non-productive hours/year.
Calculate the number of FTEs needed for the Unit. Show the formulas used and all calculations. Include the reference used for your calculations at the beginning of your work.
Calculate the TOTAL FTEs needed accounting for nonproductive time. Include the reference used for your calculations at the beginning of your work.
Sharon now knows how many total FTEs are currently needed on the unit to provide safe, quality care to the patients on the unit. However, with a 20% projected increase in occupancy rate and average length of stay remaining steady on the unit, how will the required FTEs be affected?
Calculate the TOTAL FTEs required to reflect an increased patient volume of 20% (don’t forget to account for nonproductive time).Include the reference used for your calculations at the beginning of your work.
When Sharon calculated the number of FTEs budgeted currently in this unit and compared it to the number of actual FTEs being paid for, she found she was under budget by three FTEs. Explain how that could have happened and how this information affects her FTE budget request for the next year.
During the month of February, an outpatient surgery clinic has incurred a significant unfavorable variance. The director of the clinic is quite concerned, as this has never occurred before. The director gathers information on total nursing care hours, average hourly rate of the employees, and total patient visits to determine what caused the variance.In addition, the director receives the patient acuity levels for the month of February.
Budget
Actual
Budget Variance
Patient Days
420
510
Nursing Care Hours
HPPD
5.0
5.6
Average Hourly Pay
$35.00
$45.00
$10.00
Total Payroll Costs
(Table adapted fromRundio, A. (2022). The nurse manager’s guide to budgeting and finance (3rd ed.). Sigma Theta Tau International)
Complete the monthly personnel report for the surgical unit.
Calculate each of the following. Include the formulas used with reference. Remember, as this monthly report deals with payroll, the variances should be in dollars.
Volume (efficiency) variance:
Quantity (volume) variance:
Cost (price) variance:
What is the total variance in personnel budget for this month?
Analyze all the factors that made the differences and why the variances occurred. How can this variance be justified?
In what ways might these variances inform the current or future budgets?
Approach to Personnel Case Study is clearly articulated and contains the elements needed to address the situation presented in the scenario.
ADC and Occupancy Rate
10
10%
ADC/Occupancy Rate table completed with reference for formulas included, formulas and work shown, correct unit calculations, correct unit identified.
Average LOS
10
10%
ALOS table completed with reference for formulas, formula and work shown, correct calculations, ALOS of identified unit correct.
Current FTE
15
15%
Current FTEs of identified unit calculated correctly and includes reference for formulas used, formula and work shown, calculations correct.
Total FTE (Current)
15
15%
Total FTEs (accounts for nonproductive time) of identified unit calculated correctly and includes reference for formulas used, formula and work shown, calculations correct.
Effect of Volume Increase on FTE
10
10%
Describes effect of increase of patient volume on FTEs over the next year. Describes what effect an increased length of stay would have on FTEs.
Total FTE (Projected)
15
15%
Total FTEs (accounts for nonproductive time) for projected volume increase of identified unit calculated correctly and includes reference for formulas used, formula and work shown, calculations correct.
FTE Difference Explanation
10
10%
Explains potential causes for being under budget and explicitly describes its effect on the budget request for next year. Uses data from given and calculated elements to support explanations.
Section Two: Variance Analysis
Calculation of Total Variance
35
35%
Calculations that lead to the total variance of the unit are present and include volume efficiency, volume (quantity), and cost variances. References for formulas used, formulas and all work are shown, calculations are correct.
Analysis of Variances
15
15%
All elements of variances explained, variance justification present and supported with evidence, effect on current and future budges explicit and clearly articulated.
Writing conventions, format, and reference citations
5
5%
Writing is clear and concise without grammatical and spelling errors. All references are correctly cited (if applicable) and written.
150
150%
A quality assignment will meet or exceed all of the above requirements.
Grading Rubric
Assignment Criteria
Exceptional (100%) Outstanding or highest level of performance
Exceeds (88%) Very good or high level of performance
Meets (80%) Competent or satisfactory level of performance
Needs Improvement (38%) Poor or failing level of performance
Developing (0) Unsatisfactory level of performance
ContentPossible Points = 150 Points
Section One: Staffing Budget and FTEs
Background Information
10 Points
8 Points
6 Points
0 Points
Approach to Personnel Case Study is clearly articulated and contains all the elements needed to address the situation presented in the scenario.
Approach to Personnel Case Study is generally described and contains nearly all elements needed to address the situation presented in the scenario.
Approach to Personnel Case Study is minimally described, generally stated and missing key elements needed to address the situation presented in the scenario.
Approach to Personnel Case Study is absent or does not contain adequate elements to all the elements needed to address the situation presented in the scenario.
ADC and Occupancy Rate
10 Points
8 Points
3 Points
0 Points
Table completed with formulas referenced and shown, work shown with correct calculations, and correct unit identified.
All but one element are present and correct.
All but two elements are present and correct.
No elements are present or they are present and incorrect.
Average Length of Stay (ALOS)
10Points
8 Points
3 Points
0Points
ALOS table completed with formulas referenced and shown, work shown with correct calculations, ALOS of identified unit correct.
All but one element are present and correct.
All but two elements are present and correct.
No elements are present or they are present and incorrect.
Current FTE
15 Points
10Points
5Points
0 Points
Current FTEs of identified unit calculated correctly and includes reference for formulas used, formula and work shown, calculations correct.
All but one element are present and correct.
All but two elements are present and correct.
No elements are present or they are present and incorrect.
Total FTE (Accounts for nonproductive time-current)
15 Points
10 Points
5 Points
0 Points
Total FTEs (accounts for nonproductive time) of identified unit calculated correctly and includes reference for formulas used, formula and work shown, calculations correct.
All but one element are present and correct.
All but two elements are present and correct.
No elements are present or they are present and incorrect.
Effect of Volume Increase on FTE
10 Points
5 Points
0 Points
Describes effect of increase of patient volume on FTEs over the next year. Describes what effect an increased length of stay would have on FTEs.
Only one element present or is answered correctly.
Both elements are missing or no elements are answered correctly.
Total FTE (Projected)
15 Points
10 Points
5 Points
0 Points
Total FTEs (accounts for nonproductive time) for projected volume increase of identified unit calculated correctly and includes reference for formulas used, formula and work shown, calculations correct.
All but one element are present and correct.
All but two elements are present and correct.
No elements are present or they are present and incorrect.
FTE Difference Explanation
10 Points
8 Points
3 Points
0 Points
Explains potential causes for being under budget and explicitly describes its effect on the budget request for next year. Uses data from given and calculated elements to support explanations.
All but one element are present and correct.
All but two elements are present and correct.
No elements are present or they are present and incorrect.
Section 2: Variance Analysis
Personnel Budget table
5 Points
0 Points
Table completed with correct calculations.
Table incomplete or complete with incorrect calculations.
Volume (Efficiency) Variance Calculated
10 Points
8 Points
3 Points
0 Points
Calculated correctly and includes reference for formulas used, formula and work shown, calculations correct.
All but one element are present and correct.
All but two elements are present and correct.
No elements are present or they are present and incorrect.
Volume Quantity Variance Calculated
15 Points
10 Points
5 Points
0 Points
Calculated correctly and includes reference for formulas used, formula and work shown, calculations correct.
All but one element are present and correct.
All but two elements are present and correct.
No elements are present or they are present and incorrect.
Cost (price) Variance calculated
15Points
10 Points
5 Points
0 Points
Calculated correctly and includes reference for formulas used, formula and work shown, calculations correct.
All but one element are present and correct.
All but two elements are present and correct.
No elements are present or they are present and incorrect.
Calculation of Total Variance
5 Points
0 Points
Calculation of Total Variance is correct.
Calculation of Total Variance is incorrect.
Analysis of Variances
15 Points
10 Points
5 Points
0 Points
Analysis of Variances thoroughly explained; variance justification with evidence included; effects on current and future budges explicit and clearly articulated.
Analysis of Variances generally explained; or variance justification is missing or lacks support from evidence; or effects on current and future budges is missing or generally addressed.
Analysis of Variances contains only one of the required elements: thorough explanation; variance justification with evidence included; effects on current and future budges explicit and clearly articulated.
Analysis of variances is missing or is inaccurate.
Writing Conventions, format, and reference citations
5 Points
3 Points
1 Point
0 Points
No errors in any of the three elements of writing conventions, format, and reference citations.
One error in any of the three elements of writing conventions, format, and reference citations.
Two errors in any of the three elements of writing conventions, format, and reference citations.
More than three errors in any of the three elements of writing conventions, format, and reference citations.
2. Obtain a 250 mL beaker and fill with water from the stock solution of water available. (This will be used to find the density of all three metals). The stock solution of water can be removed from the workbench once water is added to the beaker.
3. Obtain metal 1 from the stockroom and notice the approximate volume needed (found in the information tab).
4. Obtain a graduated cylinder that is larger than the approximate volume needed (if the needed volume is 10 mL, obtain a 25 mL graduated cylinder; if needed volume is 20 mL, obtain a 50 mL graduated cylinder).
5. Using a pipet (use appropriate size pipet for volume needed), transfer water from the beaker to the graduated cylinder.
6. Record volume transferred.
7. Obtain the scale from the stockroom.
8. Obtain a weigh boat from the stockroom (found under glassware).
9. Place weigh boat on scale, record weight displayed.
10. Tare weight displayed (click tare button on scale – if this button does not work, then continue with next step. Make sure you have recorded weigh boat weight, so you can subtract it to determine weight of metal).
11. Pour metal 1 onto weigh boat and record weight of metal 1 added to weigh boat.
12. Add metal from weigh boat to the graduated cylinder.
13. Record amount of metal added.
14. Record new volume.
15. Calculate the density of the metal and record.
16. Repeat for metal 2 and metal 3.
17. Identify the correct metal in provided boxes in virtual lab.
18. Take a screenshot of completed virtual lab page. For assistance taking a screenshot, refer to the following guide.
19. Submit the screenshot along with the data sheet.