Budgetary Variance Model

Budgetary Variance Model

Introduction

Radiology services and department provides a significant source for a reliable and fast diagnosis of a patient in a hospital, which involves coping up with a wide range of conflicts and pressures in handling the needs of the patients. The criticality present in the radiology department of the hospital requires efforts from the management of the hospital that are attached to the radiology department and its services. To specialize the services in the radiology department the management allocates yearly budgets to promote its services according to the upcoming tasks presented, as the services of the hospital.

The importance of appraising the performance of radiology department in a hospital is essential due to the intensified services the hospital provides to its clients and patients. In addition to evaluating the performance of the overall hospital, it is also important to evaluate the management practices through utilizing performance indicators in radiology department in a hospital (Cascade, 1990, pp.1117).

Discussion

The study of evaluating the performance and practices of management in radiology department is useful because of the reason that it helps to observe the developments concerning to the performance of the hospitals inputs and the levels of outputs it has achieved. Moreover, such evaluation also results in analyzing the trends in the cost efficiency and effectiveness that the hospital has incurred in the past years. In addition, such patterns are also helpful to analyze the satisfaction of patients that are consuming the services of the radiology departments in a hospital.

The first step in order to evaluate the budget of the radiology department in the hospital requires understanding the components of the budget. The components that help developing the budgets include a variety of components that are related to the data. These components include the inputs and outputs of variables that are required for the presenting and developing the budgets. The components in the radiology department data include the procedures, which is the output that is performed. Further, the variables of the budgetary data include variable costs and fixed cost that is attached to the data of the radiology department. These variables are justified through developing an original budget, which is developed on the basis of judgments and past trends. However, the performance of the original budget is analyzed through measuring the difference between the original budget and the actual budget, which is the actual occurrence of the variables that included procedures, variable costs and the fixed cost.

The budgets components are analyzed through observing the difference between the original and the actual budget. The component in this regard is known as the variance. The radiology department of the hospital displays the outlay of the procedures, which is the number of outputs or performed task that had been forecasted in the budget at the starting of the year. The numbers of procedure output at the initial stage were 120,000; however, the procedures at the actual stage that the radiology department presented in the hospital were 100,000 in regards to the services that were provided (Gary, ...