LSUS MHA 706 FINAL – LORD 2025/2026
Exam Questions with 100% Correct
Answers | Latest Update
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
,"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
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
, 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
Calculate... - 🧠 ANSWER ✔✔total costs of the service by aggregating
activity costs
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
STATEMENT. ALL RIGHTS RESERVED
3
Exam Questions with 100% Correct
Answers | Latest Update
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
,"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
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
, 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
Calculate... - 🧠 ANSWER ✔✔total costs of the service by aggregating
activity costs
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
STATEMENT. ALL RIGHTS RESERVED
3
