LSUS MHA 706 FINAL EXAM LATEST UPDATE 2024-2025
FINANCIAL MANAGEMENT MIDTERM 180 QUESTIONS
WITH CORRECT DETAILED ANSWERS
Question: 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
Question: 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
Question: When using the direct cost allocation system - often you are allocating
the cost of xxxx to Patient Service Departments - CORRECT ANSWER✔✔Support
(overhead) departments
Question: 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)
1
SUCCESS!
,Page 2 of 30
Relative Value Unit (RVU)
Time-Driven Activity Based Costing (TDABC)
Cost-to-Charge Ratio (CCR)
Question: 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
Question: Activity based costing (ABC) begins with the ..... that comprise the
service provided. - CORRECT ANSWER✔✔Individual Activities
Question: 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
Identify- the relevant activities
Estimate- the cost of each activity
Assign- cost drivers for each activities
2
SUCCESS!
, Page 3 of 30
Calculate- the total costs of the service by aggregating activity costs
Question: One use of managerial accounting information within a health service
organization is to... - CORRECT ANSWER✔✔-Determine the profitability of
different service lines
-Identify the lowest feasible price when prices are negotiated
-Set prices on services
Question: When a provider has market dominance, and can set its own prices
(within reason), it is said to be a price setter. In other situations, providers are
price takers. Select the responses that may describe a situation where a provider
is a "price-taker." - CORRECT ANSWER✔✔-There is payer dominance
-It is a perfectly competitive market
-The provider is dealing with a government payer/program
Question: Under marginal cost pricing, prices for a service are set to cover ....
costs - CORRECT ANSWER✔✔incremental
Question: Target costing is used by - CORRECT ANSWER✔✔price takers
3
SUCCESS!
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Ressy. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $13.99. You're not tied to anything after your purchase.
