Exam (elaborations)
LSUS MHA 706 FINAL - LORD.
- Module
- Healthcare Finance MHA 706
- Institution
- Healthcare Finance MHA 706
LSUS MHA 706 FINAL - LORD.
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LSUS MHA 706 FINAL - LORDCost Driver is the...
basis cost pool will be allocated
Cost Pool is the...
overhead amount to be allocated
Overhead Departments are...
often called cost centers
Indirect Costs
Costs of shared resources used by the entire organization
Patient Service Departments are...
often called revenue centers
Direct Costs are...
costs unique and exclusive to a department
"Dollars in the Cost Pool" / "Total Volume of Cost Driver" =
Allocation Rate
Effective cost drivers should have what characteristics(s)?
-Promote organizational cost reduction
,-Perceived as being fair
__________ is NOT a type of allocation method?
Step-Up Method
As an Accounting Manager - you are responsible for allocating the cost of
facilities to other departments. What would be an appropriate cost driver
for you to use for this allocation?
-Square footage of the department
-Housekeeping
TRUE/FALSE: Once a company uses the Direct Method to allocate costs to
revenue-producing departments within the facility - the total level of expenses
decreases for the organization.
False
When using the direct cost allocation system - often you are allocating the cost of
__________ to Patient Service Departments.
Support (overhead) Departments
__________ are accounting methods to account for "cost" at an individual
service level.
Time Driven-Costing (TDBC)
Activity Based Costing (ABC)
Cost-to-Charge Ratio (CCR)
Relative Value (RVU)
, __________ are true assumption(s) of the Cost-to-Charge Ratio Method.
Each service consumes overhead costs in the same proportion as the
department as a whole
Charges reflect the level of intensity of the service provided.
Activity Based Costing (ABC) begins with _________ that comprise the service
provided.
Individual Activities
Calculate...
total costs of the service by aggregating activity costs
Estimate...
cost of each activity
Collect...
activity data for each service
Identify...
the relevant activities
Assign...
cost drivers for each activity
One use of managerial accounting information within a health service
organization is to....
-Set prices on services
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