QUESTION: If you were going to have to cut back on costs how might you do that analysis?
What are some of the typical line items that appear in a health education program budget?
Line-items are found in the line-item budget. A line-item budget is a kind of budget where individual financial statement items are put in categories. It the type of budget that shows the relationship between financial data for the past budget and estimated for the present or upcoming budget (Dale, Kyurumyan, Kharazyan, & Barroy, 2018). Some of the items that are included in such a budget include items that are commonly found in a health care program and include a statistics budget, an operating budget, a cash budget, and a capital budget.
What are the direct costs?
Direct costs are the types of expenses that can be accounted for directly to a specific cost object. These are the type of costs or expenses that an entity incur to produce goods or offer services (Rutkove, 2016). Direct costs are very common in healthcare organizations and programs. In some instances, overhead expenses that can directly be attributed to a specific program or project are also referred to as direct costs. Examples of direct costs include direct labor, direct materials, and manufacturing supplies.
What are the indirect costs?
Indirect costs are some of the expenses that apply to more than one organizational activity. Contrary to direct costs, indirect costs cannot be pinned to a single cost object such as services or products. Some of the indirect costs include rent paid, general office expenses, salaries and wages, allowances, professional expenses, and utilities among others (Rutkove, 2016). Indirect costs apply to different business activities because they are incurred to make the operations possible. For instance, one may have to pay for utilities, salaries, and rent to ensure that operations continue.
Dale, E., Kyurumyan, A., Kharazyan, S., & Barroy, H. (2018). Budget structure in health and transition to program budgeting: lessons from Armenia (No. WHO/UHC/HGF/HEF/CaseStudy/18.12). World Health Organization.
Rutkove, S. B. (2016). Grant Budgeting. In Biomedical Research: An Insider’s Guide (pp. 143-147). Springer, New York, NY.