LSUS MHA 706 FINAL LORD EXAM QUESTIONS
WITH CORRECT ANSWERS LATEST UPDATE
GRADED A+
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
Page | 1
,-Perceived as being fair
__________ is NOT a type of allocation method?
Step-Up Method
Cost 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
Page | 2
, Indirect Costs
Costs of shared resources used by the entire organization
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
Page | 3
WITH CORRECT ANSWERS LATEST UPDATE
GRADED A+
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
Page | 1
,-Perceived as being fair
__________ is NOT a type of allocation method?
Step-Up Method
Cost 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
Page | 2
, Indirect Costs
Costs of shared resources used by the entire organization
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
Page | 3
