WGU C428 Session 2 Exam Questions
and Answers Graded A+
Activity-based costing - Correct answer-allocates costs on the basis of the basic
activities that create costs in the first place. ABC can estimate costs for individual
patients, diagnoses, services, and so on, while traditional costing cannot.
Accounting breakeven analysis - Correct answer-occurs when revenues equal
accounting costs.
Allocation rate - Correct answer-the numerical value used to allocate a cost pool to
patient services departments (e.g., $40 per square foot of occupied space).
Average cost - Correct answer-total cost divided by volume
Break-even analysis - Correct answer-estimate the volume needed (or the value of
some other variable) for the organization to break even in profitability.
Budgeting - Correct answer-planning for how much money you have and how it is
spent.
Capitated environment - - Correct answer-providers are "capped" at reimbursement
and takes on the insurance function and hence bears utilization risk.
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, Contribution margin - Correct answer-difference between unit price and the
variable cost rate, or per unit revenue minus per unit variable cost. Thus,
contribution margin is the per unit dollar amount available to first cover an
organization's fixed costs and then to contribute to profits.
Costs - Correct answer-a resource use associated with providing, or supporting, a
specific service.
Cost center - Correct answer-a subunit within an organization that incurs costs but
generates no revenues.
Cost driver - Correct answer-the basis for allocating a cost pool. Provides the most
accurate cause-and-effect relationship between the use of services and the costs of
the department using those services.
Cost pool - Correct answer-a group of overhead costs to be allocated to the patient
services departments
Cost allocation - - Correct answer-the assignment (allocation) of overhead costs,
such as financial services costs, from a support department to the patient services
departments.
Direct cost - Correct answer-- costs unique to a department.
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and Answers Graded A+
Activity-based costing - Correct answer-allocates costs on the basis of the basic
activities that create costs in the first place. ABC can estimate costs for individual
patients, diagnoses, services, and so on, while traditional costing cannot.
Accounting breakeven analysis - Correct answer-occurs when revenues equal
accounting costs.
Allocation rate - Correct answer-the numerical value used to allocate a cost pool to
patient services departments (e.g., $40 per square foot of occupied space).
Average cost - Correct answer-total cost divided by volume
Break-even analysis - Correct answer-estimate the volume needed (or the value of
some other variable) for the organization to break even in profitability.
Budgeting - Correct answer-planning for how much money you have and how it is
spent.
Capitated environment - - Correct answer-providers are "capped" at reimbursement
and takes on the insurance function and hence bears utilization risk.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
, Contribution margin - Correct answer-difference between unit price and the
variable cost rate, or per unit revenue minus per unit variable cost. Thus,
contribution margin is the per unit dollar amount available to first cover an
organization's fixed costs and then to contribute to profits.
Costs - Correct answer-a resource use associated with providing, or supporting, a
specific service.
Cost center - Correct answer-a subunit within an organization that incurs costs but
generates no revenues.
Cost driver - Correct answer-the basis for allocating a cost pool. Provides the most
accurate cause-and-effect relationship between the use of services and the costs of
the department using those services.
Cost pool - Correct answer-a group of overhead costs to be allocated to the patient
services departments
Cost allocation - - Correct answer-the assignment (allocation) of overhead costs,
such as financial services costs, from a support department to the patient services
departments.
Direct cost - Correct answer-- costs unique to a department.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
