LSUS MHA 706 FINAL EXAM
TESTBANK ON FINANCIAL
MANAGEMENT LATEST UPDATE
2025 GRADED A+
When you divide the "Dollars in the Cost Pool" by "Total Volume of Cost
Driver" - you have determined ....
The Allocation Rate
Effective cost drivers should have the following characteristic(s)
-Perceived as being fair
-Promote Organizational Cost Reduction
Which of the following is NOT a type of allocation method.
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.
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.
False
When using the direct cost allocation system - often you are allocating the
cost of xxxx to Patient Service Departments
Support (overhead) departments
Select all of the following options that are accounting methods to account for
"costs" at an individual service level
Activity Based Costing (ABC)
Relative Value Unit (RVU)
Time-Driven Activity Based Costing (TDABC)
Cost-to-Charge Ratio (CCR)
Select all of the true assumption(s) of the Cost-to-Charge Ratio Method.
Each service consumes overhead costs in the same proportion as
the department as a whole
Charges reflect the level of intensity of the service provided
Activity based costing (ABC) begins with the ..... that comprise the service
provided.
Individual Activities
, The key to cost allocation under Activity-Based-Costing is to identify the
activities that are performed to provide a particular service and then
aggregate the costs of the activities. The steps required to implement ABC
are as follows:
Collect- activity data for each service
Identify- the relevant activities
Estimate- the cost of each activity
Assign- cost drivers for each activities
Calculate- the total costs of the service by aggregating activity costs
One use of managerial accounting information within a health service
organization is to...
-Determine the profitability of different service lines
-Identify the lowest feasible price when prices are negotiated
-Set prices on services
When a provider has market dominance, and can set its own prices (within
reason), it is said to be a price setter. In other situations, providers are price
takers. Select the responses that may describe a situation where a provider
is a "price-taker."
-There is payer dominance
-It is a perfectly competitive market
-The provider is dealing with a government payer/program
TESTBANK ON FINANCIAL
MANAGEMENT LATEST UPDATE
2025 GRADED A+
When you divide the "Dollars in the Cost Pool" by "Total Volume of Cost
Driver" - you have determined ....
The Allocation Rate
Effective cost drivers should have the following characteristic(s)
-Perceived as being fair
-Promote Organizational Cost Reduction
Which of the following is NOT a type of allocation method.
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.
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.
False
When using the direct cost allocation system - often you are allocating the
cost of xxxx to Patient Service Departments
Support (overhead) departments
Select all of the following options that are accounting methods to account for
"costs" at an individual service level
Activity Based Costing (ABC)
Relative Value Unit (RVU)
Time-Driven Activity Based Costing (TDABC)
Cost-to-Charge Ratio (CCR)
Select all of the true assumption(s) of the Cost-to-Charge Ratio Method.
Each service consumes overhead costs in the same proportion as
the department as a whole
Charges reflect the level of intensity of the service provided
Activity based costing (ABC) begins with the ..... that comprise the service
provided.
Individual Activities
, The key to cost allocation under Activity-Based-Costing is to identify the
activities that are performed to provide a particular service and then
aggregate the costs of the activities. The steps required to implement ABC
are as follows:
Collect- activity data for each service
Identify- the relevant activities
Estimate- the cost of each activity
Assign- cost drivers for each activities
Calculate- the total costs of the service by aggregating activity costs
One use of managerial accounting information within a health service
organization is to...
-Determine the profitability of different service lines
-Identify the lowest feasible price when prices are negotiated
-Set prices on services
When a provider has market dominance, and can set its own prices (within
reason), it is said to be a price setter. In other situations, providers are price
takers. Select the responses that may describe a situation where a provider
is a "price-taker."
-There is payer dominance
-It is a perfectly competitive market
-The provider is dealing with a government payer/program
