MHA 706 FINAL ACTUAL EXAM PAPER
2026 QUESTIONS WITH ANSWERS
GRADED A+
>> 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)
-Promote Organizational Cost Reduction
Answer: -Perceived as being fair
>> 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
>> Select all of the following options that are accounting methods to account for
"costs" at an individual service level
Relative Value Unit (RVU)
Time-Driven Activity Based Costing (TDABC)
Cost-to-Charge Ratio (CCR)
Answer: Activity Based Costing (ABC)
>> Select all of the true assumption(s) of the Cost-to-Charge Ratio Method.
Charges reflect the level of intensity of the service provided
Answer: Each service consumes overhead costs in the same proportion as
the department as a whole
2026 QUESTIONS WITH ANSWERS
GRADED A+
>> 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)
-Promote Organizational Cost Reduction
Answer: -Perceived as being fair
>> 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
>> Select all of the following options that are accounting methods to account for
"costs" at an individual service level
Relative Value Unit (RVU)
Time-Driven Activity Based Costing (TDABC)
Cost-to-Charge Ratio (CCR)
Answer: Activity Based Costing (ABC)
>> Select all of the true assumption(s) of the Cost-to-Charge Ratio Method.
Charges reflect the level of intensity of the service provided
Answer: Each service consumes overhead costs in the same proportion as
the department as a whole
