Practice Quiz

Nurse Executive Certification Exam Prep

Category - Nurse Executive Practice Test

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You observe a negative variance in terms of your operating expenses during your monthly review of the departmental budget. After analysis, you have determined that the source of the variance is salaries, specifically overtime salaries. What should you do?
  1. Praise the staff because they have successfully kept overtime salaries to a minimum.
  2. Immediately report this salary savings to your immediate supervisor.
  3. Work with staff to collaboratively determine ways to decrease the need for overtime.
  4. Nothing at all because this variance is probably not at all accurate.
Explanation
Answer: C - You should collaboratively determine ways to decrease the need for overtime along with the staff because you have a negative variance. A negative budget variance indicates that that amount of money actually spent is MORE than the anticipated amount. A positive variance means that the amount of money actually spent is LESS than the amount that was anticipated.
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