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MHA 706 Module 4 Exam Practice Questions and Answers (100% Pass)
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MHA 706 Module 4 Exam Practice Questions and Answers (100% Pass)
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©PREP4EXAMS @2024 [REAL EXAM DUMPS] Wednesday, July 17, 2024 1:27 AMMHA 706 Module 4 Exam Practice Questions and Answers (100% Pass)
Patient Service Departments - ✔️✔️Are often called revenue centers
Indirect Cost - ✔️✔️Are cost associated with shared resources used by the entire organization
Direct Costs - ✔️✔️Are costs unique and exclusive to a department
Overhead departments - ✔️✔️Are often called costs centers
Cost Pool - ✔️✔️Is the overhead amount to be allocated
Cost Driver - ✔️✔️Is the basis on which the cost pool will be allocated
When you divide the "Dollars in the Cost Pool" by "Total Volume of Cost Driver" what have
you determined? - ✔️✔️Allocation Rate
What characteristics should a Effective cost drivers have? - ✔️✔️Perceived as being fair,
Promote organizational cost reduction
Types of allocation methods. - ✔️✔️Reciprocal Method, Step-Down Method, Direct 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? -
✔️✔️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.
True or false? - ✔️✔️False
When using the direct cost allocation system - often you are allocating the cost of ____ to
Patient Service Departments. - ✔️✔️Support (overhead) departments
What are accounting methods to account for "costs" at an individual service level? -
✔️✔️Cost-to-Charge Ratio (CCR), Relative Value Unit (RVU), Activity Based Costing (ABC),
Time-Driven Activity Based Costing (TDABC)
What are the assumptions of the Cost to charge Ratio method? - ✔️✔️Charges reflect the level
of intensity of the service provided, Each service consumes overhead costs in the same
proportion as the department as a whole.
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