nswer the following questions using the Health Information Department Budget furnished below, specifically the data included in Table 7–3 on page 252:
1. What would be the dollar impact if the 5 percent increase planned for January 1 were reduced to 3.5 percent and postponed until April 1?
2. As an alternate cost-saving strategy, determine the annual savings if all hourly staff were reduced from 40 to 37.5 hours as their standard workweek. Consider the top three staff—director, compliance specialist, and registries coordinator—as salaried and thus unaffected by the workweek change.
3. Determine the total dollar impact if both of the foregoing strategies were implemented together. Remember that the pay increase affects everyone but that the 37.5-hour week affects just hourly staff.
Sample Health Information Department Budget
This budget is based on the following premises:
1. Fiscal year: July 1 through June 30
2. Workweek: 40 hours/week; 2,080 hours/year per FTE
3. Cost of living increase: 5 percent of current base rate (see Table 8–3 for detailed cost of living calculations by position title)
4. Effective date of cost of living increase: January 1
5. Overtime rate: time and a half, based on current base for employee
6. Holiday pay: regular base rate (for employees who work on a scheduled holiday: double time, calculated on current base for each employee)
7. Temporary agency rate: average rate is $13/hr. for clerical worker, no fringe benefits given
8. Sick pay: calculated on each employee’s current base
9. Fringe benefits: 29 percent of total wages and salaries for the department; 29 percent for each individual employee
10. Wage and salary calculations are displayed to show these details:
Factor Example
Current annual base $58,000
July–December of current calendar year—total earnings 29,000
January 1 cost of living increase (5%) 2,900
New annual base effective January 1 60,900
January–June of coming calendar year—total earnings 30,450
Total needed for full 12-month period of the fiscal year 29,000 +30,450 $59,450
Health Information Department Budget
Personnel Costs
Object Code
01 Wages and Salaries $461,724.00
02 Fringe Benefits 133,900.00
03 Vacation Relief Coverage 2,000.00
04 Sign- on Bonuses 10,000,00
Subtotal A $607,624.00
Equipment
Object Code
10 office chairs (6 at $128 each) $768.00
Automatic Paper Shredder 429.00
Stepstools (3 at $59 each) 177.00
Multiterminal Wordprocessing System 74,000.00
Subtotal B $75,374.00
Supplies
Object Code
021 Printed Forms, Stationery, Office $51,999.00 Supplies: Vendors
026 Books 1000.00
027 Journals and Magazine Subscriptions 1,620.00
028 General Stores Supplies—Internal 3,400.00
035 Parking -0-
044 Travel 1,700.00
051 Film Rental -0-
Subtotal C $59,719
Services
Object Code
122 Contractual Temporaries 1,850.00
131 Equipment Rental 2,000.00
134 Outside Contractual Service 5,000.00
136 Equipment Repair Contracts 2,000.00
138 Computer License Agreement 32,000.00
Subtotal D $42,850.00
Cost Transfers
Object Code
150 Telephone $3,840.00
151 Work Orders -0-
152 Postage 360.00
153 Photocopy/Print Shop 200.00
154 TV-VCR Rental -0-
158 Dietary 560.00
Subtotal E $4,960.00
Summary
Personnel Costs 607,624.00
Equipment 75,374.00
Supplies 59,719.00
Services 42,850.00
Cost Transfers 4,960.00
Total $790,527.00
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