MHA 706 FINAL STUDY GUIDE 2026
QUESTIONS WITH ANSWERS GRADED A+
⫸ Indirect Costs Answer: Are costs associated with shared resources
used by the entire organization.
⫸ Overhead Departments Answer: Are also called cost center.
⫸ Patients Service Departments Answer: Are often called revenue
centers.
⫸ Cost Pool Answer: Is the overhead amount to be allocated.
⫸ Cost Driver Answer: Is the basis on which the cost pool will be
allocated.
⫸ When you divide the "Dollar in the Cost Pool" by "Total Volume of
Cost Driver" - you have determined...
a) Allocation Rate
b) Cost Basis
c) Variable Rate
d) Fixed Costs Answer: a) Allocation Rate
Allocation Rate = Dollar in the Cost Pool/ Total Volume of Cost Driver
QUESTIONS WITH ANSWERS GRADED A+
⫸ Indirect Costs Answer: Are costs associated with shared resources
used by the entire organization.
⫸ Overhead Departments Answer: Are also called cost center.
⫸ Patients Service Departments Answer: Are often called revenue
centers.
⫸ Cost Pool Answer: Is the overhead amount to be allocated.
⫸ Cost Driver Answer: Is the basis on which the cost pool will be
allocated.
⫸ When you divide the "Dollar in the Cost Pool" by "Total Volume of
Cost Driver" - you have determined...
a) Allocation Rate
b) Cost Basis
c) Variable Rate
d) Fixed Costs Answer: a) Allocation Rate
Allocation Rate = Dollar in the Cost Pool/ Total Volume of Cost Driver
