| Course | HA520 Health Care Financial Management |
|---|---|
| Unit | Unit 6 |
| Paper type | Operating budget |
| Length | About 640 words, 5 pages double-spaced |
| Format | APA 7 student paper |
| School | Purdue University Global |
| Program | Master of Health Administration (MHA) |
| Updated | October 2026 |
Free sample paper for HA520 Unit 6
Every Line Starts From a Count: An Operating Budget for a Composite Hospital's Outpatient Imaging Department, Building Revenue, Technologist Hours, Supplies, Fixed Costs and Overhead From 7,200 MRI and 11,400 CT Scans
[Student Name]
Purdue University Global
HA520: Health Care Financial Management
Unit 6 Operating Budget
[Instructor Name]
[Date]
The department, volumes, rates and costs are composite and bracketed; the worksheet is simplified for a course budget.
Volume
A statistics budget comes first, because revenue and most expenses depend on it (Cleverley & Cleverley, 2018). MRI: [7,200] scans, last year's [6,950] plus [250] from a new orthopedic practice that has signed a referral agreement. CT: [11,400] scans, last year's [11,180] plus [two] percent for population growth in the service area.
Revenue
Net revenue per scan after contractual allowances: MRI [$498]; CT [$286], taken from last year's actual payments by payer and adjusted for known contract changes. MRI revenue: [7,200] × [$498] = [$3,585,600]. CT revenue: [11,400] × [$286] = [$3,260,400]. Total revenue: [$6,846,000].
Salaries, Position by Position
Technologist hours are driven by paid hours per scan: [1.79] for MRI and [1.35] for CT, including setup, scanning, documentation and nonproductive time. MRI technologists: [7,200] × [1.79] = [12,888] hours, [6.2] FTEs. CT technologists: [11,400] × [1.35] = [15,390] hours, [7.4] FTEs. Technologists at [$46.50] an hour over 2,080 hours: [$1,315,392]. Schedulers: [3.0] FTEs, [$131,040]. Contrast nursing: [1.5] FTEs, [$140,400]. Manager: [$148,576]. Total salaries: [$1,735,408]. Benefits at [26] percent: [$451,206]. Starting from hours per scan means a change in volume moves the staffing budget automatically, instead of leaving last year's positions in place.
Supplies
Contrast and supplies are priced per scan: MRI [$38], CT [$27]. MRI supplies: [$273,600]. CT supplies: [$307,800]. Total: [$581,400].
Fixed Costs
Overnight teleradiology coverage: [$240,000]. Service contracts on two scanners: [$362,000]. Equipment depreciation: [$480,000]. Total fixed: [$1,082,000].
Direct Expense and Overhead
Direct expense: [$1,735,408] + [$451,206] + [$581,400] + [$1,082,000] = [$3,850,014]. Overhead allocation at [28] percent of direct expense, the finance department's standard rate for ancillary departments: [$1,078,004]. Total expense: [$4,928,018]. Departmental margin: [$6,846,000] − [$4,928,018] = [$1,917,982].
Variable and Fixed
Of direct expense, salaries, benefits and supplies vary with volume over a budget year, though technologist staffing moves in steps; teleradiology, service contracts and depreciation do not. If MRI volume falls [ten] percent, revenue drops about [$359,000], while variable costs fall only about [$150,000], so the margin falls by about [$209,000].
A Note on Overhead
A flat [28] percent rate charges imaging for overhead in proportion to its direct expense, not to its actual use of support services. Critics of traditional cost allocation in health care argue that such rates distort the true cost of services, and they propose measuring what each patient's care actually consumes in staff minutes and equipment (Kaplan & Porter, 2011). A time-driven approach estimates the cost of each resource per minute and multiplies by the minutes a service uses (Kaplan & Anderson, 2004). The budget uses the hospital's rate but flags it as an area for review.
Assumptions to Watch
The new orthopedic referrals, the net rate per scan and the hours per scan are the three assumptions with the largest effect. Each will be checked monthly against actual results.
How the Budget Will Be Used
The manager will compare actual results with this budget monthly and, because volume will not match the forecast exactly, will flex the budget to actual scans before judging staffing and supply performance. The next unit carries out that comparison for the first half of the year.
Limits
The worksheet simplifies payer differences and assumes stable staffing. Equipment downtime is not modeled.
Conclusion
A budget built from counts and drivers can be explained line by line and adjusted when volume or rates change. The department expects a margin of about [$1.92] million, most sensitive to MRI volume and the net rate per scan.
References
Cleverley, W. O., & Cleverley, J. O. (2018). Essentials of health care finance (8th ed.). Jones & Bartlett Learning.
Kaplan, R. S., & Anderson, S. R. (2004). Time-driven activity-based costing. Harvard Business Review, 82(11), 131-138.
Kaplan, R. S., & Porter, M. E. (2011). How to solve the cost crisis in health care. Harvard Business Review, 89(9), 46-64.
Reading the HA 520 Unit 6 instructions
Unit 6 commonly hands students a department's volumes and rates and asks for a one-year budget worksheet with a narrative behind it. Instructions usually require a volume forecast, revenue, salaries and benefits, supplies, fixed costs, overhead and a resulting margin, with each line tied to a driver. Many instructors want the narrative to identify the assumptions with the largest effect. Expect to cite finance and cost accounting sources in APA style, show each calculation so it can be checked, mark composite figures with brackets and leave the hospital unnamed. A budget that starts from volume and drivers can be updated when assumptions change, while one copied from last year's totals cannot.
Inside the HA520 Unit 6 example
The sample opens with a margin note on ordering lines by dependency and a statistics budget citing a finance text. Volume, revenue and position-by-position salaries follow, and the highlighted sentence explains why hours per scan matter. Supplies, fixed costs, direct expense and overhead are calculated line by line, with a margin note on showing the arithmetic. A section separates variable from fixed costs and estimates the effect of lower MRI volume. A note on overhead cites critiques of traditional cost allocation and time-driven costing. Assumptions to watch carry a third note, then how the budget will be flexed and monitored monthly, limits such as unmodeled downtime and a conclusion on the most sensitive assumptions.
Where the points sit in the HA520 Unit 6 rubric
Operating budget rubrics in HA 520 usually award points for a volume forecast, driver-based revenue, accurate staffing calculations, supply and fixed cost lines, overhead treatment, arithmetic that adds up, a narrative of assumptions and citations. Volume points depend on stated sources for the forecast. Revenue points go to net payment rather than charges. Staffing points reward hours per unit converted to FTEs. Cost points require each line's driver. Overhead points go to explaining the method. Narrative points reward identifying the most sensitive assumptions. Budgets that separate variable from fixed costs and estimate the effect of a volume change usually score best, as they demonstrate that the manager grasps the department's risk.
HA520 Unit 6 help from the desk
Budget papers often lose points by listing expense totals without showing how each was built. Another gap is budgeting revenue at gross charges. Some budgets keep last year's staffing regardless of volume. Others apply overhead without explaining the method or its limits. Forecast volume with stated adjustments, price revenue at net payment, convert hours per scan to FTEs, price supplies per unit, list fixed costs separately and show overhead as a rate. Then name the assumptions with the largest effect and how they will be monitored. Explain how the budget will be flexed when actual volume differs, since few departments hit their forecast exactly.
Get an HA520 Unit 6 example written to your instructions
Budget exercises differ mainly in their drivers, so the Unit 6 case figures matter most: volumes, rates, staffing and cost assumptions. Include them with the rubric, and with the section's budget template where one is issued. A driver-based budget and its narrative return within 24-48h, assumptions stated and every line traceable, and first samples come free. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.
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HA520 Unit 6 questions, answered
Where can I find a free HA520 Unit 6 sample paper?
The complete HA520 Unit 6 operating budget is shown on this page, building a composite imaging department's revenue and costs from scan counts and drivers, with three sources. Your own department's budget can be built the same way.
What is a statistics budget?
The volume forecast, such as scans or patient days, from which revenue and most expenses in an operating budget are calculated.
How do you budget staff from volume?
Multiply forecast units by paid hours per unit, then divide by 2,080 hours to get full-time equivalents.
What is overhead allocation?
Assigning a share of support department costs, such as administration and facilities, to a revenue-producing department.
How long is the HA520 Unit 6 budget?
A two-page worksheet and a three-page narrative.