1|Page
MHA 706 FINAL-LORD EXAM ||VERIFIED EXAM!!,
MOST RECENT EXAM 2026/2027 ACTUAL COMPLETE
REAL VERIFIED EXAM QUESTIONS WITH DETAILED
VERIFIED ANSWERS (CORRECT ANSWERS)
"Dollars in the Cost Pool" / "Total Volume of Cost Driver" =
- Answer-Allocation Rate
Effective cost drivers should have what characteristics(s)?
- Answer--Promote organizational cost reduction
-Perceived as being fair
__________ is NOT a type of allocation method? -
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? - Answer--Square
footage of the department
-Housekeeping
,2|Page
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. - Answer-False
Cost Driver is the... - Answer-basis cost pool will be
allocated
Cost Pool is the... - Answer-overhead amount to be
allocated
Overhead Departments are... - Answer-often called cost
centers
Indirect Costs - Answer-Costs of shared resources used
by the entire organization
Patient Service Departments are... - Answer-often called
revenue centers
Direct Costs are... - Answer-costs unique and exclusive to
a department
, 3|Page
When using the direct cost allocation system - often you
are allocating the cost of __________ to Patient Service
Departments. - Answer-Support (overhead) Departments
__________ are accounting methods to account for "cost"
at an individual service level. - Answer-Time Driven-
Costing (TDBC)
Activity Based Costing (ABC)
Cost-to-Charge Ratio (CCR)
Relative Value (RVU)
__________ are true assumption(s) of the Cost-to-Charge
Ratio Method. - 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 _________ that
comprise the service provided. - Answer-Individual
Activities
MHA 706 FINAL-LORD EXAM ||VERIFIED EXAM!!,
MOST RECENT EXAM 2026/2027 ACTUAL COMPLETE
REAL VERIFIED EXAM QUESTIONS WITH DETAILED
VERIFIED ANSWERS (CORRECT ANSWERS)
"Dollars in the Cost Pool" / "Total Volume of Cost Driver" =
- Answer-Allocation Rate
Effective cost drivers should have what characteristics(s)?
- Answer--Promote organizational cost reduction
-Perceived as being fair
__________ is NOT a type of allocation method? -
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? - Answer--Square
footage of the department
-Housekeeping
,2|Page
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. - Answer-False
Cost Driver is the... - Answer-basis cost pool will be
allocated
Cost Pool is the... - Answer-overhead amount to be
allocated
Overhead Departments are... - Answer-often called cost
centers
Indirect Costs - Answer-Costs of shared resources used
by the entire organization
Patient Service Departments are... - Answer-often called
revenue centers
Direct Costs are... - Answer-costs unique and exclusive to
a department
, 3|Page
When using the direct cost allocation system - often you
are allocating the cost of __________ to Patient Service
Departments. - Answer-Support (overhead) Departments
__________ are accounting methods to account for "cost"
at an individual service level. - Answer-Time Driven-
Costing (TDBC)
Activity Based Costing (ABC)
Cost-to-Charge Ratio (CCR)
Relative Value (RVU)
__________ are true assumption(s) of the Cost-to-Charge
Ratio Method. - 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 _________ that
comprise the service provided. - Answer-Individual
Activities
