MHA 706 Final Frequently Tested Exam Questions
With Verified Multiple Choice and Conceptual
Actual 100% Correct Detailed Answers
Guaranteed Pass!!Current Update!!
1. Cost allocation refers to which of the following?
A. Assigning overhead only to support departments
B. Assigning all overhead costs to the departments that create the need for such
costs
C. Eliminating overhead from patient services
D. Allocating only direct costs
✔ Correct Answer: B
2. A cost pool is defined as:
A. Indirect costs of patient services
B. Overhead amount to be allocated
C. Profit margin on overhead
D. Total organizational expenses
✔ Correct Answer: B
3. A cost driver is:
A. Any cost not allocated
B. The manager responsible for cost increases
C. The basis on which a cost pool is allocated
D. A method for reducing overhead
✔ Correct Answer: C
4. Which cost allocation method allocates support department costs directly to
patient service departments only?
A. Step-down method
,B. Reciprocal method
C. Direct method
D. Marginal method
✔ Correct Answer: C
5. Which cost allocation method recognizes some support-to-support services?
A. Direct method
B. Marginal method
C. Activity-based method
D. Step-down method
✔ Correct Answer: D
6. Which method fully accounts for mutual services among all support
departments?
A. Step-down method
B. Reciprocal method
C. Direct method
D. CCR method
✔ Correct Answer: B
7. The charge-to-cost ratio (CCR) ties overhead allocation to:
A. Patient volume
B. Square footage
C. Charges or revenues
D. Labor hours
✔ Correct Answer: C
8. The RVU method ties overhead use to:
A. Fixed costs only
B. Complexity and time required for each service
C. Revenue per department
D. Physician preference
✔ Correct Answer: B
, 9. Activity-based costing (ABC) is used to:
A. Allocate costs uniformly across all departments
B. Identify activity streams and allocate costs by service line
C. Remove indirect costs
D. Allocate only labor costs
✔ Correct Answer: B
10. A price setter is a provider that:
A. Must accept market prices
B. Has market dominance and sets its own prices
C. Operates under government regulation
D. Cannot adjust charges
✔ Correct Answer: B
11. Price takers operate in:
A. Dominant provider markets
B. Perfectly competitive or payer-dominated markets
C. Monopoly environments
D. Highly restricted markets
✔ Correct Answer: B
12. Full-cost pricing covers:
A. Only variable costs
B. Only direct costs
C. All direct and indirect costs plus profit
D. Only overhead
✔ Correct Answer: C
12. Marginal cost pricing covers:
A. All costs plus profit
B. Only incremental or variable costs
C. Overhead only
D. Capital costs
✔ Correct Answer: B
With Verified Multiple Choice and Conceptual
Actual 100% Correct Detailed Answers
Guaranteed Pass!!Current Update!!
1. Cost allocation refers to which of the following?
A. Assigning overhead only to support departments
B. Assigning all overhead costs to the departments that create the need for such
costs
C. Eliminating overhead from patient services
D. Allocating only direct costs
✔ Correct Answer: B
2. A cost pool is defined as:
A. Indirect costs of patient services
B. Overhead amount to be allocated
C. Profit margin on overhead
D. Total organizational expenses
✔ Correct Answer: B
3. A cost driver is:
A. Any cost not allocated
B. The manager responsible for cost increases
C. The basis on which a cost pool is allocated
D. A method for reducing overhead
✔ Correct Answer: C
4. Which cost allocation method allocates support department costs directly to
patient service departments only?
A. Step-down method
,B. Reciprocal method
C. Direct method
D. Marginal method
✔ Correct Answer: C
5. Which cost allocation method recognizes some support-to-support services?
A. Direct method
B. Marginal method
C. Activity-based method
D. Step-down method
✔ Correct Answer: D
6. Which method fully accounts for mutual services among all support
departments?
A. Step-down method
B. Reciprocal method
C. Direct method
D. CCR method
✔ Correct Answer: B
7. The charge-to-cost ratio (CCR) ties overhead allocation to:
A. Patient volume
B. Square footage
C. Charges or revenues
D. Labor hours
✔ Correct Answer: C
8. The RVU method ties overhead use to:
A. Fixed costs only
B. Complexity and time required for each service
C. Revenue per department
D. Physician preference
✔ Correct Answer: B
, 9. Activity-based costing (ABC) is used to:
A. Allocate costs uniformly across all departments
B. Identify activity streams and allocate costs by service line
C. Remove indirect costs
D. Allocate only labor costs
✔ Correct Answer: B
10. A price setter is a provider that:
A. Must accept market prices
B. Has market dominance and sets its own prices
C. Operates under government regulation
D. Cannot adjust charges
✔ Correct Answer: B
11. Price takers operate in:
A. Dominant provider markets
B. Perfectly competitive or payer-dominated markets
C. Monopoly environments
D. Highly restricted markets
✔ Correct Answer: B
12. Full-cost pricing covers:
A. Only variable costs
B. Only direct costs
C. All direct and indirect costs plus profit
D. Only overhead
✔ Correct Answer: C
12. Marginal cost pricing covers:
A. All costs plus profit
B. Only incremental or variable costs
C. Overhead only
D. Capital costs
✔ Correct Answer: B
