LSUS MHA 706 FINAL EXAM 2025 | FINANCIAL
MANAGEMENT MIDTERM | ALL QUESTIONS AND
CORRECT ANSWERS | ALREADY GRADED A+
7. "Dollars in the Cost Pool" / "Total Volume of Cost Driver" =:
Allocation Rate
8. Effective cost drivers should have what characteristics(s)?: -
Promote orga- nizational cost reduction
-Perceived as being fair
9. is NOT a type of allocation method?: Step-Up Method
10. 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
1/
,-Housekeeping
11. 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
12. When using the direct cost allocation system - often you are
allocating the cost of to Patient Service Departments.: Support
(overhead) Departments
13. are accounting methods to account for "cost" at an
individual service level.: Time Driven-Costing (TDBC)
Activity Based Costing
(ABC) Cost-to-Charge
Ratio (CCR) Relative
Value (RVU)
14. are 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.
15. Activity Based Costing (ABC) begins with that comprise
the service provided.: Individual Activities
16. Calculate ANS : total costs of the service by aggregating activit
costs
17. Estimate ANS : cost of each activity
18. Collect ANS : activity data for each service
19. Identify ANS : the relevant activities
,20. Assign ANS : cost drivers for each activity
2/
, 21. One use of managerial accounting information within a
health service organization is to. ANS : -Set prices on services
-Identify the lowest feasible price when prices are negotiated
-Determine the profitability of different service lines
22. 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. may describe a situation
where a provider is a "price taker.": There is a payer dominance
It is a perfectly competitive market
The provider is dealing with a government payer/program
23. Under marginal cost pricing, prices for a service are set to cover
costs.: incremental
24. To break-even, revenues: must equal total costs
25. Target costing is used by: price takers
26. Capitation rates are quoted: per member per month basis
27. Scenario analysis: is technique in which alternative scenarios are
analyzed
28. The interest rate is described as the on a debt security.:
cost of capital
29. Subordinated debenture
bonds Debenture bonds
MANAGEMENT MIDTERM | ALL QUESTIONS AND
CORRECT ANSWERS | ALREADY GRADED A+
7. "Dollars in the Cost Pool" / "Total Volume of Cost Driver" =:
Allocation Rate
8. Effective cost drivers should have what characteristics(s)?: -
Promote orga- nizational cost reduction
-Perceived as being fair
9. is NOT a type of allocation method?: Step-Up Method
10. 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
1/
,-Housekeeping
11. 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
12. When using the direct cost allocation system - often you are
allocating the cost of to Patient Service Departments.: Support
(overhead) Departments
13. are accounting methods to account for "cost" at an
individual service level.: Time Driven-Costing (TDBC)
Activity Based Costing
(ABC) Cost-to-Charge
Ratio (CCR) Relative
Value (RVU)
14. are 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.
15. Activity Based Costing (ABC) begins with that comprise
the service provided.: Individual Activities
16. Calculate ANS : total costs of the service by aggregating activit
costs
17. Estimate ANS : cost of each activity
18. Collect ANS : activity data for each service
19. Identify ANS : the relevant activities
,20. Assign ANS : cost drivers for each activity
2/
, 21. One use of managerial accounting information within a
health service organization is to. ANS : -Set prices on services
-Identify the lowest feasible price when prices are negotiated
-Determine the profitability of different service lines
22. 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. may describe a situation
where a provider is a "price taker.": There is a payer dominance
It is a perfectly competitive market
The provider is dealing with a government payer/program
23. Under marginal cost pricing, prices for a service are set to cover
costs.: incremental
24. To break-even, revenues: must equal total costs
25. Target costing is used by: price takers
26. Capitation rates are quoted: per member per month basis
27. Scenario analysis: is technique in which alternative scenarios are
analyzed
28. The interest rate is described as the on a debt security.:
cost of capital
29. Subordinated debenture
bonds Debenture bonds
