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MHA 706 Final Exam/101 Questions and Answers/100% Accurate
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MHA 706 Final Exam/101 Questionsand Answers/100% Accurate
Indirect Costs - -Are costs associated with shared resources used by the
entire organization
-Cost Driver - -Is the basis on which the cost pool will be allocated
-Cost Pool - -Is the overhead amount to be allocated
-Overhead departments - -Are often called costs centers
-Patient Service Departments - -Are often called revenue centers
-Direct Costs - -Are costs unique and exclusive to a department
-When you divide the "Dollars in the Cost Pool" by "Total Volume of Cost
Driver" - you have determined .... - -The Allocation Rate
-Effective cost drivers should have the following characteristic(s) - --
Perceived as being fair
-Promote Organizational Cost Reduction
-Which of the following 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
-Once a company uses the direct method to allocate indirect 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 xxxx to Patient Service Departments - -Support (overhead)
departments
-Select all of the following options that are accounting methods to account
for "costs" at an individual service level - -Activity Based Costing (ABC)
Relative Value Unit (RVU)
Time-Driven Activity Based Costing (TDABC)
Cost-to-Charge Ratio (CCR)
, -Select all of the 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 the ..... that comprise the service
provided. - -Individual Activities
-The key to cost allocation under Activity-Based-Costing is to identify the
activities that are performed to provide a particular service and then
aggregate the costs of the activities. The steps required to implement ABC
are as follows: - -Collect- activity data for each service
Identify- the relevant activities
Estimate- the cost of each activity
Assign- cost drivers for each activities
Calculate- the total costs of the service by aggregating activity costs
-One use of managerial accounting information within a health service
organization is to... - --Determine the profitability of different service lines
-Identify the lowest feasible price when prices are negotiated
-Set prices on services
-When a provider has market dominance, and can set its own prices (within
reason), it is said to be a price setter. In other situations, providers are price
takers. Select the responses that may describe a situation where a provider
is a "price-taker." - --There is payer dominance
-It is a perfectly competitive market
-The provider is dealing with a government payer/program
-Under marginal cost pricing, prices for a service are set to cover .... costs -
-incremental
-Target costing is used by - -price takers
-Scenario analysis - -is a technique in which alternative scenarios are
analyzed
-Capitation rates are quoted - -per member per month basis
-To break-even, revenues - -must equal total costs
-The interest rate is described as the ..... on a debt security. - -cost of
capital
-Select all the "corporate" bond types - -mortgage bonds, debenture bonds,
subordinated debenture bonds
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