MHA 706 Module 4 Questions with Verified
Correct Answers
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
Correct Answers
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
