Planning and Budgeting

For this assignment, please compose a paragraph-length response (generally 4-5 sentences) to each of the below 7 items. These responses must be in your own words and not copied from the textbook or any other source.

This assignment is worth a total of 28 points.

(Up to 5 points may be deducted for spelling/punctuation/grammar/sentence structure/references/citations issues.)

1. Please describe the purpose and the various components of the operating budget. [4 points]

2. Please define volume forecasting and explain how it affects other items in the operating budget.

3. Please describe at least four factors that are considered when volume forecasts are being developed.

4. Please explain what is meant by variance analysis in health care finance.

5. How is variance analysis used by departmental or clinic managers?

6. Define and explain the relationship between simple variance analysis and flexible variance analysis.

7. What is the advantage of flexible variance analysis compared to simple variance analysis?