Please write a response to each discussion post. 4.1 Winterstien Top of Form As a nurse in the acute care hospital setting, I can see how contribution margins can help manage units within a large organization, especially if the units have separate budgets. Fiscal performance in healthcare organizations is evident by profit, liquidity and debt structure (Broyles, Khaliq & Mattachione, 2009). In recent years, the dependence of healthcare organizations on the prospective payment method that Obamacare enforces makes it even more important to reduce financial liabilities and risks and promote healthy budgets (Broyles et al., 2009). It is important for managers to understand how to analyze and understand contribution margins as they help with planning and control of operations (Baker & Baker, 2014). According to Broyles et al. (2009) contribution margin is the difference between revenue and total variable costs. The formula is recognized as contribution margin= revenue - variable costs (Baker & Baker, 2014). The contribution margin allows a manager to visualize the break even point in which there is an excess of revenue over costs and a profit is realized (Baker & Baker, 2014). In contrast, if the expenses are more excessive than revenues, then a loss will be realized (Baker & Baker, 2014). The advantage of determining the contribution margin is that it allows management to allocate the excess funds to areas that need more funding after fixed costs are covered or using that revenue other areas that benefit the unit (AllBusiness, nd). 4.1 Franks Top of Form          A contribution margin refers to a per unit measure of a product's gross operating margin calculated as the product's price minus its total variable costs (Iles, 2005). In my current role as a clinical liaison, Contribution Margins would not help me manage my present work, however, my LTACH facility is a for-profit facility and I'm sure Contribution Margins come into play when speaking of our corporate level. Understanding the concept of a contribution margin is important because it is what allows a health care organization to cover their fixed costs and generate a profit (Iles, 2005). If the contribution margin does not exceed a company's fixed expenses, it does not make a profit. A company that has a contribution margin that is less than its fixed expenses incurs a loss. Health care facility managers/owners who assume that a higher gross margin is better for their business may find themselves in financial difficulty because they aren't considering the additional costs to complete "the sale" (Iles, 2005). It is important for health care organizations to compare various sales channels and choose the best option for their facility.  Bottom of Form 4.1 Kelly Top of Form According to Baker and Baker (2006), contribution margins are computed as net revenues less variable costs.  Contribution margins help me in my present work by determining if new vendors and workflows that we are impl.

1. Please write a response to each discussion post.
4.1 Winterstien
Top of Form
As a nurse in the acute care hospital setting, I can see how
contribution margins can help manage units within a large
organization, especially if the units have separate budgets.
Fiscal performance in healthcare organizations is evident by
profit, liquidity and debt structure (Broyles, Khaliq &
Mattachione, 2009). In recent years, the dependence of
healthcare organizations on the prospective payment method
that Obamacare enforces makes it even more important to
reduce financial liabilities and risks and promote healthy
budgets (Broyles et al., 2009). It is important for managers to
understand how to analyze and understand contribution margins
as they help with planning and control of operations (Baker &
Baker, 2014).
According to Broyles et al. (2009) contribution margin is the
difference between revenue and total variable costs. The
formula is recognized as contribution margin= revenue -
variable costs (Baker & Baker, 2014). The contribution margin
allows a manager to visualize the break even point in which
there is an excess of revenue over costs and a profit is realized
(Baker & Baker, 2014). In contrast, if the expenses are more
excessive than revenues, then a loss will be realized (Baker &
Baker, 2014). The advantage of determining the contribution
margin is that it allows management to allocate the excess funds
to areas that need more funding after fixed costs are covered or
using that revenue other areas that benefit the unit (AllBusiness,
nd).
4.1 Franks
Top of Form

2. A contribution margin refers to a per unit measure of a
product's gross operating margin calculated as the product's
price minus its total variable costs (Iles, 2005). In my current
role as a clinical liaison, Contribution Margins would not help
me manage my present work, however, my LTACH facility is a
for-profit facility and I'm sure Contribution Margins come into
play when speaking of our corporate level. Understanding the
concept of a contribution margin is important because it is what
allows a health care organization to cover their fixed costs and
generate a profit (Iles, 2005). If the contribution margin does
not exceed a company's fixed expenses, it does not make a
profit. A company that has a contribution margin that is less
than its fixed expenses incurs a loss. Health care facility
managers/owners who assume that a higher gross margin is
better for their business may find themselves in financial
difficulty because they aren't considering the additional costs to
complete "the sale" (Iles, 2005). It is important for health care
organizations to compare various sales channels and choose the
best option for their facility.
Bottom of Form
4.1 Kelly
Top of Form
According to Baker and Baker (2006), contribution margins are
computed as net revenues less variable costs. Contribution
margins help me in my present work by determining if new
vendors and workflows that we are implementing are
successful. My department makes estimates to present to
executives when gaining approval for a new vendor or project,
but it is also important to follow up and make sure that the new
vendor or project was successful.
4.1 McElvain
Top of Form
Do you believe that Contribution Margins can help you manage

3. in your present work?
Per Baker & Baker, “The manager should know how to analyze
the relationship of cost, volume, and profit. This important
information assists the manager in properly understanding and
controlling operations. The first step in such analysis is the
computation of the contribution margin.” I do think that
contribution margins could help me in my present work as the
Business Office Manager to help me better understand the
accounts payable portion of my job and to better understand
budget purposes as a future administrator. By using the
contribution margin calculation and computing either fixed or
variable cost classifications it would help my organization build
a cleaner and more organized budget with a more cost-
conscience agenda in mind.
4.2
Franks
COLLAPSE
Top of Form
I have never had to compute depreciation expenses in my
current or past roles. It is important for a health care
administrator to know about depreciation expenses because
depreciation and cash outlays for capital need not match over
time and it is critical to consider both depreciation-based
measures and cash or cash-flow based measures in examining
the institution's financial health (Needleman, 2016). A hospital
with large level-payment loans will have more cash coming in
and larger margins on a cash flow basis than it appears on its
revenue and expense statement. At the same time, it will have
long-term liabilities to repay principle that will be larger than
later depreciation charges, and a depreciation-based projection
may underestimate the hospital's cash needs. If the health care
institution treats the cash coming in early in the cycle as
discretionary income, it may be short of funds to fully pay the
loan in later years (Needleman, 2016).
My LTACH is a for-profit organization and for-profit

4. entities commonly subtract from the income they report to
shareholders certain income tax expenses that did not occasion
an outflow of funds during the fiscal year covered by the report.
The cash revenues for both for-profit and non-profit institutions
also include funds that represent recovery of earlier cash
outlays that have been carried as assets on the provider's
balance sheet (Gray, 1986). These recoveries, the most common
of which are depreciation and amortization, are shown on the
income statement as expenses and are deducted from revenues
to arrive at what for-profit organizations call net profits (Gray,
1986).
4.2 Randolph
Top of Form
I have never personally had to compute depreciation expense
but as a healthcare administrator this is very important. As a
healthcare administrator it is important to understand what fixed
assets are so that one can determine what type of items should
be depreciated. As a healthcare administrator it is important to
understand the value of items as well as their salvage price and
upkeep cost. In certain situations it might be cheaper to replace
an item than to maintance it or even upkeep it. It is important to
understand the equipment and tools necessary for whatever type
of healthcare organization you are running. The expected life of
equipment and quality of brands is another component one
might consider before buying new stuff. There are a lot of
things that healthcare mangers must be aware of and
depreciation expenses is definitely a very important component
to what an administrator does.
4.2 McElvain
Top of Form
Depreciation expense spreads, or allocates, the cost of a fixed
asset over the useful life of that asset (Baker & Baker, 2014).”
No, I personally have not had to compute depreciation expense

5. in my current line of work. As a healthcare administrator, I
would need to have knowledge of both depreciation expenses as
well as capital expenditures. Depreciation expenses is
recognized by spreading out the cost of owning buildings or
equipment over a span of years and issuing those costs
throughout multiple financial statements by recognizing specific
portions of the cost shown as depreciation expense. A building,
for example would also classify as a capital expenditure since it
is a long-term asset and would need to be recognized as such on
the organization’s balance sheet. Other areas to be familiar with
when using depreciation expense are the useful life of the asset,
salvage value, and the reserve for depreciation. Useful life of
the asset determines the period of time in which the asset's cost
will be spread. Salvage value is also known as scrap value,
meaning any expected cash value to be present at the end of the
items' useful life.
4.2_Buda
Top of Form
Depreciation expense allocates the cost of a fixed asset, such as
a large piece of equipment or a building, over the useful life of
the item (Baker & Baker, 2014). I have not had to compute
depreciation expense. One of the benefits of working for a very
large organization is that we have a finance department, and the
financial analysts who work in that department do things like
compute depreciation so managers do not have to. Depreciation
expense is expressed in department’s monthly financial reports,
and while managers do not have to complete the calculations,
they do have to understand the concept and how it impacts the
department’s finances.
Healthcare administrators need to first understand what fixed
assets are so they know what types of items should be
depreciated. They also need to understand the useful value and
salvage values of items so they now how long items will be

6. depreciated and what amount will be depreciated. Even if the
managers do not calculate the depreciation themselves, they
need to understand what method their organization uses to
calculate depreciation so they will understand the impact on the
financials for the areas they manage.