SILLOTH NURSING AND RESIDENTIAL CARE HOME

Silloth Nursing and Residential Care Home



Silloth Nursing and Residential Care Home

1.1Explain the principles of costing and business control systems

1.1 AnswerThe primary purpose of principles of costing is to evaluate the fair cost of product or service whose price is set by the market demand and supply factors such as advertising, promotional cost, competitive advantage, availability of substitutes, or complementary products. In order to ensure that company is accomplishing adequate return over its investment, it must have good understanding of factors contributing to the company's cost overall, structure of cost, and overhaul cost. Cost of services offered by Silloth Nursing and Residential Care Home are mainly based upon following doctrines:

Cost can be categorised as Fixed and Variable only.

Variable cost is the cost that varies with the level of output produced such as labour, direct material, number of beds, wages etc.

Fixed cost is one that remains constant regardless of level or number of output produced such as rent, property, machines, rates, etc.

The Nursing Home aims at mentioning the transparent costing system and breaks down the cost to further components to governance cost, fund raising cost, management and administration cost, direct charity expenses, and other direct and indirect costs.

(Stratton, A., 2012, n.d.)

The quality of information pertaining to cost should be sufficient and good enough for both not for profit organizations and for profit organizations. The management must have adequate tools and information pertaining to cost associated to the services and sources of findings to carry out the primary aim of the organization. Many studies have been conducted in past with an agenda of improvising the overall efficiency of the healthcare system in UK. The main areas of focus in these studies have been costing, budgeting and funding. It becomes necessary to assess and evaluate the costing needs of the services offered by an organization in order to determine its future needs relevant to financing needs of an organization.

Silloth Nursing is basically run and managed by group of trustees that are solely responsible for controlling and managing the cost of business. In this regard, they constantly review and revise the risk with higher probability and then make a plan accordingly to cater the issue. The risks related to increased cost faced by business in the given report to analyze for the year 2008 is due to increased number of patients or people required to be facilitated as per government's policy. In addition, management of nursing Home initiated training programs to train staff at all levels in handling patients and provision of first aid which resulted in to reduction of overall training cost (Annual Report, 2008, p. 1-14).

1.2Identify information needed to manage financial resources

1.2 AnswerIn order to manage financial resources, it is must to completely understand the nature of business, goods and services being offered, scale of operations, location, business goals, business and financial plans, risk management framework, reserves policy, investment required, etc. The founders and leaders of organization in healthcare setting are responsible for acquiring variety ...