MHA 706 Final EXAM Module 2
Conventional Budgeting - CORRECT ANSWER the old budget is the starting
point, typically only small changes are made, changes are often airsoft equally
bottom-up budgets - CORRECT ANSWER Begin at sub-unit (departmental)
level.
Are reviewed and compiled by the finan...
Conventional Budgeting - CORRECT ANSWER the old budget is the starting
point, typically only small changes are made, changes are often airsoft equally
bottom-up budgets - CORRECT ANSWER Begin at sub-unit (departmental)
level.
Are reviewed and compiled by the finance department.
Are approved by senior management.
top-down budgets - CORRECT ANSWER Begin at the finance department with
senior management guidance.
Are sent to the departments for review.
Variance - CORRECT ANSWER difference between the actual results and the
budgeted value
cost allocation - CORRECT ANSWER assign all overhead costs to the
departments that create the need for such costs, typically the patient services
department
cost pool - CORRECT ANSWER Overhead amount to be allocated.
Consists of the direct costs of one overhead department
Internal Rate of Return (IRR) - CORRECT ANSWER expected rate of return,
measures a project's rate (percentage) of return, the discount rate that forces a
project's NPV to equal $0
Modified Internal Rate of Return (MIRR) - CORRECT ANSWER a capital
budgeting method that converts a project's cash flows using a more consistent
reinvestment rate prior to applying the IRR decision rule
Net Present Social Value Model - CORRECT ANSWER total value of a project is
equal to its NPV plus social value
Project scoring - CORRECT ANSWER technique for incorporating both
financial and non financial factors in capital investment decisions
, post-audit - CORRECT ANSWER a formal process for monitoring a project's
performance over time
Charge-to-cost ratio (CCR) - CORRECT ANSWER ties overhead resource
consumption to charges (or revenues)
Relative Value Unit (RVU) - CORRECT ANSWER ties the use of overhead
resources to the complexity and time required for each service as measured by
RVUs
Activity-based costing (ABC) - CORRECT ANSWER A method of cost
accounting designed to identify streams of activity and then to allocate costs
differently in different service lines
price setter - CORRECT ANSWER provider has market dominance and can set
it's own prices
Full-cost pricing - CORRECT ANSWER Prices are set to cover all costs
associated with providing a particular service (direct and indirect costs), typically
adds a profit component
marginal cost pricing - CORRECT ANSWER prices for a service are set to
cover incremental, or marginal, costs (generally recovering only direct variable
costs)
target costing - CORRECT ANSWER revenues are projected assuming prices
as given in the marketplace, required profits are subtracted from revenues,
remainder is target cost level
term loan - CORRECT ANSWER a bank loan that lasts for a specific term
term loan examples - CORRECT ANSWER student loans, mortgage
Treasury Bonds - CORRECT ANSWER Bonds issued by the federal government,
sometimes referred to as government bonds.
Corporate Bonds - CORRECT ANSWER bonds issued by for-profit corporations
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