MHA 706 FINAL EXAM 2026/2027 || HEALTHCARE
ADMINISTRATION REVIEW || VERIFIED QUESTIONS &
ANSWERS || HIGH-YIELD STUDY GUIDE || COMPLETE TEST
BANK || GRADED A+
Indirect Costs - CORRECT ANSWER -Are costs associated with shared
resources used by the entire organization
Cost Driver - CORRECT ANSWER -Is the basis on which the cost pool
will be allocated
Cost Pool - CORRECT ANSWER -Is the overhead amount to be allocated
Overhead departments - CORRECT ANSWER -Are often called costs
centers
Patient Service Departments - CORRECT ANSWER -Are often called
revenue centers
Direct Costs - CORRECT ANSWER -Are costs unique and exclusive to a
department
When you divide the "Dollars in the Cost Pool" by "Total Volume of Cost
Driver" - you have determined .... - CORRECT ANSWER -The Allocation
Rate
Effective cost drivers should have the following characteristic(s) - CORRECT
ANSWER --Perceived as being fair
-Promote Organizational Cost Reduction
Which of the following is NOT a type of allocation method. - CORRECT
ANSWER -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. - CORRECT ANSWER -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. - CORRECT ANSWER -False
When using the direct cost allocation system - often you are allocating the cost
of xxxx to Patient Service Departments - CORRECT ANSWER -Support
(overhead) departments
Select all of the following options that are accounting methods to account for
"costs" at an individual service level - CORRECT ANSWER -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. -
CORRECT ANSWER -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. - CORRECT ANSWER -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:
- CORRECT ANSWER -Collect- activity data for each service
ADMINISTRATION REVIEW || VERIFIED QUESTIONS &
ANSWERS || HIGH-YIELD STUDY GUIDE || COMPLETE TEST
BANK || GRADED A+
Indirect Costs - CORRECT ANSWER -Are costs associated with shared
resources used by the entire organization
Cost Driver - CORRECT ANSWER -Is the basis on which the cost pool
will be allocated
Cost Pool - CORRECT ANSWER -Is the overhead amount to be allocated
Overhead departments - CORRECT ANSWER -Are often called costs
centers
Patient Service Departments - CORRECT ANSWER -Are often called
revenue centers
Direct Costs - CORRECT ANSWER -Are costs unique and exclusive to a
department
When you divide the "Dollars in the Cost Pool" by "Total Volume of Cost
Driver" - you have determined .... - CORRECT ANSWER -The Allocation
Rate
Effective cost drivers should have the following characteristic(s) - CORRECT
ANSWER --Perceived as being fair
-Promote Organizational Cost Reduction
Which of the following is NOT a type of allocation method. - CORRECT
ANSWER -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. - CORRECT ANSWER -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. - CORRECT ANSWER -False
When using the direct cost allocation system - often you are allocating the cost
of xxxx to Patient Service Departments - CORRECT ANSWER -Support
(overhead) departments
Select all of the following options that are accounting methods to account for
"costs" at an individual service level - CORRECT ANSWER -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. -
CORRECT ANSWER -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. - CORRECT ANSWER -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:
- CORRECT ANSWER -Collect- activity data for each service
