The nurse manager is creating the budget for the next fiscal year. Because the client census has been higher in the past year, more supplies were used. Which type of cost does this reflect?
1. Fixed costs
2. Variable costs
3. Direct costs
4. Zero-based costs
2
Rationale 1: Fixed costs are costs that remain the same for the budget period regardless of the activity level of the organization, such as insurance premiums.
Rationale 2: Variable costs depend on and change in direct proportion to client volume and acuity, such as client care supply expenses.
Rationale 3: Direct costs are expenses that directly affect client care, such as salaries for nurses.
Rationale 4: Zero-based costs are not a cost classification.
Global Rationale:
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