CSAF EXAM LATEST
Which option is false concerning return on investment? - ANSWERS-
The formula to calculate the return is losses plus realized gains minus
realized income.
Definition of Internal Control - ANSWERS-The definition of internal
control is taken from Internal Control—Integrated Framework published
by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO). COSO provides a flexible and adaptable set of
tools for assessing, monitoring, and strengthening an organization's
comprehensive system of internal control. Issued in 1992 and most
recently in 2013, COSO is the leading internal control framework used
by organizations in the United States. The recent issue recognizes the
following business environment changes have occurred since 1992 -
globalization, virtualization, regulation, technological innovation,
increasing complexity.
The COSO framework defines internal control broadly: Internal control
is a process—affected by an entity's board of directors, management,
and other personnel—designed to provide reasonable assurance
regarding the achievement of objectives in the following categories:
Inherent in this definition are the concepts of safeguarding assets and
stewardship of resources.
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PAGE
1
, CSAF EXAM LATEST
Five Components - ANSWERS-Internal controls include the following
five interrelated components that affect management's objectives in each
of the three categories noted on the previous slide. A total of 17 codified
principles exist to support application of 5 internal control components:
Control Environment
Risk Assessment
Control Activities
Information and Communication
Monitoring
Contribution Margin - ANSWERS-The difference between marginal
revenue and marginal cost; Contribution margin goes toward supporting
fixed costs; if it exceeds that, it goes to profit.
Break-even point - ANSWERS-Break-even point is the volume number
of units when the marginal revenue covers the fixed cost opportunity;
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2
, CSAF EXAM LATEST
The break-even point is the level of sales volume of a product producing
the exact amount of Contribution margin needed to cover fixed costs
Overhead - ANSWERS-Indirect costs; Examples may include
administrative and general costs, maintenance, etc.
Activity-Based costing - ANSWERS-Activity-based costing (ABC) is a
method of determining product costs using cost drivers or activity
measures, that cause indirect costs to be incurred. Ideal cost drivers are
activities that pertain to each procedure in varying amounts.
Activity-based costing is generally considered a more accurate costing
method than the proportionate allocation method. It is, however, often
more expensive to determine due to the necessary data collection.
Service-Line Costing - ANSWERS-Healthcare organizations have
developed product lines based on major diagnostic categories (for
example, diseases of the digestive system or obstetric procedures).
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PAGE
3
, CSAF EXAM LATEST
The advantage of analyzing results by diagnostic category is that it
develops an estimate of total resources consumed, including resources
consumed in shared departments
Service Line Costing Profitability Analysis - ANSWERS-Product-line
costing can also be useful in assessing the profitability of a proposed
managed care contract and in developing carve-out rates for specific
types of cases (for example, open-heart surgeries and bone marrow
transplants).
Responsibility Accounting - ANSWERS-Responsibility accounting is
the assignment or allocation of cost to the individual manager who is
primarily responsible for making decisions about those costs. Once the
primary responsibility for incurring a specific cost has been established,
various management reports, such as departmental expense reports, can
be developed to assess a manager's effectiveness.
An Example
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PAGE
4
Which option is false concerning return on investment? - ANSWERS-
The formula to calculate the return is losses plus realized gains minus
realized income.
Definition of Internal Control - ANSWERS-The definition of internal
control is taken from Internal Control—Integrated Framework published
by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO). COSO provides a flexible and adaptable set of
tools for assessing, monitoring, and strengthening an organization's
comprehensive system of internal control. Issued in 1992 and most
recently in 2013, COSO is the leading internal control framework used
by organizations in the United States. The recent issue recognizes the
following business environment changes have occurred since 1992 -
globalization, virtualization, regulation, technological innovation,
increasing complexity.
The COSO framework defines internal control broadly: Internal control
is a process—affected by an entity's board of directors, management,
and other personnel—designed to provide reasonable assurance
regarding the achievement of objectives in the following categories:
Inherent in this definition are the concepts of safeguarding assets and
stewardship of resources.
END OF
PAGE
1
, CSAF EXAM LATEST
Five Components - ANSWERS-Internal controls include the following
five interrelated components that affect management's objectives in each
of the three categories noted on the previous slide. A total of 17 codified
principles exist to support application of 5 internal control components:
Control Environment
Risk Assessment
Control Activities
Information and Communication
Monitoring
Contribution Margin - ANSWERS-The difference between marginal
revenue and marginal cost; Contribution margin goes toward supporting
fixed costs; if it exceeds that, it goes to profit.
Break-even point - ANSWERS-Break-even point is the volume number
of units when the marginal revenue covers the fixed cost opportunity;
END OF
PAGE
2
, CSAF EXAM LATEST
The break-even point is the level of sales volume of a product producing
the exact amount of Contribution margin needed to cover fixed costs
Overhead - ANSWERS-Indirect costs; Examples may include
administrative and general costs, maintenance, etc.
Activity-Based costing - ANSWERS-Activity-based costing (ABC) is a
method of determining product costs using cost drivers or activity
measures, that cause indirect costs to be incurred. Ideal cost drivers are
activities that pertain to each procedure in varying amounts.
Activity-based costing is generally considered a more accurate costing
method than the proportionate allocation method. It is, however, often
more expensive to determine due to the necessary data collection.
Service-Line Costing - ANSWERS-Healthcare organizations have
developed product lines based on major diagnostic categories (for
example, diseases of the digestive system or obstetric procedures).
END OF
PAGE
3
, CSAF EXAM LATEST
The advantage of analyzing results by diagnostic category is that it
develops an estimate of total resources consumed, including resources
consumed in shared departments
Service Line Costing Profitability Analysis - ANSWERS-Product-line
costing can also be useful in assessing the profitability of a proposed
managed care contract and in developing carve-out rates for specific
types of cases (for example, open-heart surgeries and bone marrow
transplants).
Responsibility Accounting - ANSWERS-Responsibility accounting is
the assignment or allocation of cost to the individual manager who is
primarily responsible for making decisions about those costs. Once the
primary responsibility for incurring a specific cost has been established,
various management reports, such as departmental expense reports, can
be developed to assess a manager's effectiveness.
An Example
END OF
PAGE
4
