MHAghn706ghnFinalghnExam
IndirectghnCostsghn-
ghnCORRECTghnANSWER✔Areghncostsghnassociated ghnwithghnsharedghnresour
cesghnusedghnbyghntheghnentireghnorganization
CostghnDriverghn-
ghnCORRECTghnANSWER✔Isghntheghnbasisghnonghnwhichghntheghncostghnpoolghn
willghnbeghnallocated
CostghnPoolghn-
ghnCORRECTghnANSWER✔Isghntheghnoverheadghnamountghntoghnbeghnallocate
d
Overheadghndepartmentsghn-
ghnCORRECTghnANSWER✔Areghnoftenghncalledghncostsghncenters
PatientghnServiceghnDepartmentsghn-
ghnCORRECTghnANSWER✔Areghnoftenghncalledghnrevenueghncenters
DirectghnCostsghn-
ghnCORRECTghnANSWER✔Areghncostsghnuniqueghnandghnexclusiveghntoghnaghnd
epartment
,Whenghnyoughndivideghntheghn"DollarsghninghntheghnCostghnPool"ghnbyghn"TotalghnVo
lumeghnofghnCostghnDriver"ghn-ghnyoughnhaveghndeterminedghn....ghn-
ghnCORRECTghnANSWER✔TheghnAllocation ghnRate
Effectiveghncostghndriversghnshouldghnhaveghntheghnfollowingghncharacteristic(s)gh
n-ghnCORRECTghnANSWER✔-Perceivedghnasghnbeingghnfair
-PromoteghnOrganizationalghnCostghnReduction
WhichghnofghntheghnfollowingghnisghnNOTghnaghntypeghnofghnallocationghnmethod.ghn-
ghnCORRECTghnANSWER✔step-upghnmethod
AsghnanghnAccountingghnManagerghn-
ghnyoughnareghnresponsibleghnforghnallocatingghntheghncostghnofghnFacilitiesghntoghnoth
erghndepartments.ghnWhatghnwouldghnbeghnanghnappropriateghncostghndriverghnforghny
oughntoghnuseghnforghnthisghnallocation.ghn-
ghnCORRECTghnANSWER✔Squareghnfootageghnofghntheghndepartment
Onceghnaghncompanyghnusesghntheghndirectghnmethodghntoghnallocateghnindirectghnco
stsghntoghnrevenue-producingghndepartmentsghnwithinghntheghnfacilityghn-
ghntheghntotalghnlevelghnofghnexpensesghndecreasesghnforghntheghnorganization. ghn-
ghnCORRECTghnANSWER✔False
Whenghnusingghntheghndirectghncostghnallocationghnsystemghn-
ghnoftenghnyoughnareghnallocating ghntheghncostghnofghnxxxxghntoghnPatientghnServiceghn
Departmentsghn-
ghnCORRECTghnANSWER✔Supportghn(overhead)ghndepartments
, Selectghnallghnofghntheghnfollowingghnoptionsghnthatghnareghnaccountingghnmethodsgh
ntoghnaccountghnforghn"costs"ghnatghnanghnindividualghnserviceghnlevelghn-
ghnCORRECTghnANSWER✔Activity ghnBasedghnCostingghn(ABC)
RelativeghnValueghnUnitghn(RVU)
Time-DrivenghnActivityghnBasedghnCostingghn(TDABC)ghn
Cost-to-ChargeghnRatioghn(CCR)
Selectghnallghnofghntheghntrueghnassumption(s)ghnofghntheghnCost-to-
ChargeghnRatioghnMethod.ghn-
ghnCORRECTghnANSWER✔Eachghnserviceghnconsumesghnoverheadghncostsghn
inghntheghnsameghnproportionghnasghntheghndepartmentghnasghnaghnwhole
Chargesghnreflectghntheghnlevelghnofghnintensityghnofghntheghnserviceghnprovided
Activityghnbasedghncostingghn(ABC)ghnbeginsghnwithghntheghn.....ghnthatghncomprise
ghntheghnserviceghnprovided.ghn-
ghnCORRECTghnANSWER✔IndividualghnActivities
TheghnkeyghntoghncostghnallocationghnunderghnActivity-Based-
Costingghnisghntoghnidentifyghntheghnactivitiesghnthatghnareghnperformedghntoghnprovi
deghnaghnparticularghnserviceghnandghnthenghnaggregateghntheghncostsghnofghntheghnacti
vities.ghnTheghnstepsghnrequiredghntoghnimplementghnABCghnareghnasghnfollows:ghn-
ghnCORRECTghnANSWER✔Collect-ghnactivityghndataghnforghneachghnservice
Identify-ghntheghnrelevantghnactivities
Estimate-ghntheghncostghnofghneachghnactivity
Assign-ghncostghndriversghnforghneachghnactivities
IndirectghnCostsghn-
ghnCORRECTghnANSWER✔Areghncostsghnassociated ghnwithghnsharedghnresour
cesghnusedghnbyghntheghnentireghnorganization
CostghnDriverghn-
ghnCORRECTghnANSWER✔Isghntheghnbasisghnonghnwhichghntheghncostghnpoolghn
willghnbeghnallocated
CostghnPoolghn-
ghnCORRECTghnANSWER✔Isghntheghnoverheadghnamountghntoghnbeghnallocate
d
Overheadghndepartmentsghn-
ghnCORRECTghnANSWER✔Areghnoftenghncalledghncostsghncenters
PatientghnServiceghnDepartmentsghn-
ghnCORRECTghnANSWER✔Areghnoftenghncalledghnrevenueghncenters
DirectghnCostsghn-
ghnCORRECTghnANSWER✔Areghncostsghnuniqueghnandghnexclusiveghntoghnaghnd
epartment
,Whenghnyoughndivideghntheghn"DollarsghninghntheghnCostghnPool"ghnbyghn"TotalghnVo
lumeghnofghnCostghnDriver"ghn-ghnyoughnhaveghndeterminedghn....ghn-
ghnCORRECTghnANSWER✔TheghnAllocation ghnRate
Effectiveghncostghndriversghnshouldghnhaveghntheghnfollowingghncharacteristic(s)gh
n-ghnCORRECTghnANSWER✔-Perceivedghnasghnbeingghnfair
-PromoteghnOrganizationalghnCostghnReduction
WhichghnofghntheghnfollowingghnisghnNOTghnaghntypeghnofghnallocationghnmethod.ghn-
ghnCORRECTghnANSWER✔step-upghnmethod
AsghnanghnAccountingghnManagerghn-
ghnyoughnareghnresponsibleghnforghnallocatingghntheghncostghnofghnFacilitiesghntoghnoth
erghndepartments.ghnWhatghnwouldghnbeghnanghnappropriateghncostghndriverghnforghny
oughntoghnuseghnforghnthisghnallocation.ghn-
ghnCORRECTghnANSWER✔Squareghnfootageghnofghntheghndepartment
Onceghnaghncompanyghnusesghntheghndirectghnmethodghntoghnallocateghnindirectghnco
stsghntoghnrevenue-producingghndepartmentsghnwithinghntheghnfacilityghn-
ghntheghntotalghnlevelghnofghnexpensesghndecreasesghnforghntheghnorganization. ghn-
ghnCORRECTghnANSWER✔False
Whenghnusingghntheghndirectghncostghnallocationghnsystemghn-
ghnoftenghnyoughnareghnallocating ghntheghncostghnofghnxxxxghntoghnPatientghnServiceghn
Departmentsghn-
ghnCORRECTghnANSWER✔Supportghn(overhead)ghndepartments
, Selectghnallghnofghntheghnfollowingghnoptionsghnthatghnareghnaccountingghnmethodsgh
ntoghnaccountghnforghn"costs"ghnatghnanghnindividualghnserviceghnlevelghn-
ghnCORRECTghnANSWER✔Activity ghnBasedghnCostingghn(ABC)
RelativeghnValueghnUnitghn(RVU)
Time-DrivenghnActivityghnBasedghnCostingghn(TDABC)ghn
Cost-to-ChargeghnRatioghn(CCR)
Selectghnallghnofghntheghntrueghnassumption(s)ghnofghntheghnCost-to-
ChargeghnRatioghnMethod.ghn-
ghnCORRECTghnANSWER✔Eachghnserviceghnconsumesghnoverheadghncostsghn
inghntheghnsameghnproportionghnasghntheghndepartmentghnasghnaghnwhole
Chargesghnreflectghntheghnlevelghnofghnintensityghnofghntheghnserviceghnprovided
Activityghnbasedghncostingghn(ABC)ghnbeginsghnwithghntheghn.....ghnthatghncomprise
ghntheghnserviceghnprovided.ghn-
ghnCORRECTghnANSWER✔IndividualghnActivities
TheghnkeyghntoghncostghnallocationghnunderghnActivity-Based-
Costingghnisghntoghnidentifyghntheghnactivitiesghnthatghnareghnperformedghntoghnprovi
deghnaghnparticularghnserviceghnandghnthenghnaggregateghntheghncostsghnofghntheghnacti
vities.ghnTheghnstepsghnrequiredghntoghnimplementghnABCghnareghnasghnfollows:ghn-
ghnCORRECTghnANSWER✔Collect-ghnactivityghndataghnforghneachghnservice
Identify-ghntheghnrelevantghnactivities
Estimate-ghntheghncostghnofghneachghnactivity
Assign-ghncostghndriversghnforghneachghnactivities
