MHA 706 Final Exam Questions with Complete Solutions Graded A+
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Course
LSUS MHA 706
Institution
LSUS MHA 706
Indirect Costs - Answer: Are costs associated with shared resources used by the entire organization
Cost Driver - Answer: Is the basis on which the cost pool will be allocated
Cost Pool - Answer: Is the overhead amount to be allocated
Overhead departments - Answer: Are often called cos...
MHA 706 Final
Exam Questions
with Complete
Solutions Graded
A+
Denning [Date] [Course title]
, Indirect Costs - Answer: Are costs associated with shared resources used by the entire organization
Cost Driver - Answer: Is the basis on which the cost pool will be allocated
Cost Pool - Answer: Is the overhead amount to be allocated
Overhead departments - Answer: Are often called costs centers
Patient Service Departments - Answer: Are often called revenue centers
Direct Costs - Answer: 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 .... - Answer: The Allocation Rate
Effective cost drivers should have the following characteristic(s) - Answer: -Perceived as being fair
-Promote Organizational Cost Reduction
Which of the following is NOT a type of allocation method. - Answer: 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. - Answer:
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. - Answer: False
When using the direct cost allocation system - often you are allocating the cost of xxxx to Patient Service
Departments - Answer: Support (overhead) departments
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