DLM (ASCP) Study Questions with Correct Answers
100%
Project Volumes (forecasting stage) - CORRECT ANSWER-based on expert opinion, stats, historical data,
shifts in patient mix, changes in medical staff composition, changes in inflation/reimbursement ratws,
expansion/cutbacks, population fluctuations based on economy
Steps to creating a budget - CORRECT ANSWER-1. project volumes
2. convert volumes to revenue
3. convert volumes into expense requirements
4. Adjust revenue/ expenses as necessary to meet budget margin
gross revenue - CORRECT ANSWER-Rates x Production Unit (Billable test volume)
Expenses - CORRECT ANSWER-salaries/wages, reference service, instrument lease, maintenance
contracts, education/travel
Financial Statements - CORRECT ANSWER-convey the financial status of an organization
4 main types - income statement, balance sheet statement of changes in equity and statement of cash
flows.
income statement - CORRECT ANSWER-summarizes the operations of an organization with a focus on its
revenues, expenses, and profitability. contains operational results over a period of time.
depreciation - CORRECT ANSWER-noncash charge against earnings on income statement that reflect the
"wear and tear" on a business' fixed assets (property and equipment). loss of value
salvage value - CORRECT ANSWER-amount received when final disposition occurs at end of the asset's
useful life.
annual depreciation - CORRECT ANSWER-(initial cost - salvage value)/ useful life
,Profit - CORRECT ANSWER-net income -expense
cashflow - CORRECT ANSWER-net income + depreciation
Total Profit Margin - CORRECT ANSWER-Net income divided by total revenues. It measures the amount
of total profit per dollar of total revenues.
fixed costs - CORRECT ANSWER-cost not related to the volume of services delivered (ex. facilities cost,
lab admin, instrument leases, maintenance contracts)
variable cost - CORRECT ANSWER-directly related to the volume of services delivered (ex. supplies, labor
costs)
Profit Analysis - CORRECT ANSWER-technique use to analyze the effects of volume changes on profit. can
also be used to analyze effects of volume changes on costs.
Total Costs - CORRECT ANSWER-fixed costs + variable costs
Variable costs = variable cost rate x volume
contribution margin - CORRECT ANSWER-difference between per unit revenue and per unit variable cost.
gives the amount left to cover the fixed costs. after fixed costs are covered what's left contributes to the
profit.
accounting breakeven - CORRECT ANSWER-Volume needed to produce zero profit. Revenues cover all
accounting costs.
Total Revenue (cost x volume) - Total Variable (variable cost rate x volume) - fixed costs = $0
economic breakeven - CORRECT ANSWER-occurs when all accounting costs plus a profit target are
covered
total revenue - total variable cost- fixed cost = profit
, Surcharge/Cost Plus - CORRECT ANSWER-used for reference/send out testing. Determine cost of doing a
procedure then add markup factor to get appropriate price.
weight value basis - CORRECT ANSWER-each test performed is assigned a weight based on cost of
performing the test in relation to the procedure.
patient day factor - CORRECT ANSWER-the number of patients in a hospital on a given day.
(average patient day/ daily census for the year) x 365
tests per patient days - CORRECT ANSWER-test volume/ patient days
revenue per test - CORRECT ANSWER-gross revenue/test volume
direct costs - CORRECT ANSWER-test-specific costs (Variable)
examples - supplies, instrumentation, reagents, tech time
indirect cost - CORRECT ANSWER-remain constant
examples - lab admin, medical records, house keeping, utilities, etc. (fixed/semi-variable)
unit costs - CORRECT ANSWER-total direct + indirect expenses
Employment cycle - CORRECT ANSWER-covers all stages in the process of employing staff:
1. recruitment and acquisition costs (pre-employment screen)
2. training/developmental costs (ongoing)
3. productive/operational periods
4. termination/separation of employee from institution costs
analyze labor costs - CORRECT ANSWER-institutional labor cost evaluation (employment cycle)
technical evaluation of labor cost - assign labor costs to production activities that generate expenses.
helps manager identify where efforts are being expended and productivity
100%
Project Volumes (forecasting stage) - CORRECT ANSWER-based on expert opinion, stats, historical data,
shifts in patient mix, changes in medical staff composition, changes in inflation/reimbursement ratws,
expansion/cutbacks, population fluctuations based on economy
Steps to creating a budget - CORRECT ANSWER-1. project volumes
2. convert volumes to revenue
3. convert volumes into expense requirements
4. Adjust revenue/ expenses as necessary to meet budget margin
gross revenue - CORRECT ANSWER-Rates x Production Unit (Billable test volume)
Expenses - CORRECT ANSWER-salaries/wages, reference service, instrument lease, maintenance
contracts, education/travel
Financial Statements - CORRECT ANSWER-convey the financial status of an organization
4 main types - income statement, balance sheet statement of changes in equity and statement of cash
flows.
income statement - CORRECT ANSWER-summarizes the operations of an organization with a focus on its
revenues, expenses, and profitability. contains operational results over a period of time.
depreciation - CORRECT ANSWER-noncash charge against earnings on income statement that reflect the
"wear and tear" on a business' fixed assets (property and equipment). loss of value
salvage value - CORRECT ANSWER-amount received when final disposition occurs at end of the asset's
useful life.
annual depreciation - CORRECT ANSWER-(initial cost - salvage value)/ useful life
,Profit - CORRECT ANSWER-net income -expense
cashflow - CORRECT ANSWER-net income + depreciation
Total Profit Margin - CORRECT ANSWER-Net income divided by total revenues. It measures the amount
of total profit per dollar of total revenues.
fixed costs - CORRECT ANSWER-cost not related to the volume of services delivered (ex. facilities cost,
lab admin, instrument leases, maintenance contracts)
variable cost - CORRECT ANSWER-directly related to the volume of services delivered (ex. supplies, labor
costs)
Profit Analysis - CORRECT ANSWER-technique use to analyze the effects of volume changes on profit. can
also be used to analyze effects of volume changes on costs.
Total Costs - CORRECT ANSWER-fixed costs + variable costs
Variable costs = variable cost rate x volume
contribution margin - CORRECT ANSWER-difference between per unit revenue and per unit variable cost.
gives the amount left to cover the fixed costs. after fixed costs are covered what's left contributes to the
profit.
accounting breakeven - CORRECT ANSWER-Volume needed to produce zero profit. Revenues cover all
accounting costs.
Total Revenue (cost x volume) - Total Variable (variable cost rate x volume) - fixed costs = $0
economic breakeven - CORRECT ANSWER-occurs when all accounting costs plus a profit target are
covered
total revenue - total variable cost- fixed cost = profit
, Surcharge/Cost Plus - CORRECT ANSWER-used for reference/send out testing. Determine cost of doing a
procedure then add markup factor to get appropriate price.
weight value basis - CORRECT ANSWER-each test performed is assigned a weight based on cost of
performing the test in relation to the procedure.
patient day factor - CORRECT ANSWER-the number of patients in a hospital on a given day.
(average patient day/ daily census for the year) x 365
tests per patient days - CORRECT ANSWER-test volume/ patient days
revenue per test - CORRECT ANSWER-gross revenue/test volume
direct costs - CORRECT ANSWER-test-specific costs (Variable)
examples - supplies, instrumentation, reagents, tech time
indirect cost - CORRECT ANSWER-remain constant
examples - lab admin, medical records, house keeping, utilities, etc. (fixed/semi-variable)
unit costs - CORRECT ANSWER-total direct + indirect expenses
Employment cycle - CORRECT ANSWER-covers all stages in the process of employing staff:
1. recruitment and acquisition costs (pre-employment screen)
2. training/developmental costs (ongoing)
3. productive/operational periods
4. termination/separation of employee from institution costs
analyze labor costs - CORRECT ANSWER-institutional labor cost evaluation (employment cycle)
technical evaluation of labor cost - assign labor costs to production activities that generate expenses.
helps manager identify where efforts are being expended and productivity
