The scenario is in an acute care hospital setting:
- What is an operating budget?
- What is a capital budget?
- Why is a capital budget developed separately from the operating budget?
- What is the definition of a capital budget item in a organization?
- An example of a possible capital request in an organization?
What is an operating budget?
An operating budget defines a company's estimated revenues and expenses for a set time period, usually 1-year.
What is a capital budget?
A capital budget defines a company's ability to make a large purchase (i.e. property, plant and equipment initial purchase or upgrade). The ...
Solution is comprised of defining an operating budget and capital budget and answers the question why a capital budget is developed separate from an operating budget. Also defines what a capital budget item in an organization is and provides an example of a possible capital request in an organization.