LSUS MHA 706 FINAL –
LORD QUESTIONS AND
ANSWERS
, 1. Cost Driver is the... basis cost pool will be allocated
2. Cost Pool is the... overhead amount to be allocated
3. Overhead Departments are... often called cost centers
4. Indirect Costs Costs of shared resources used by the
entire organization
5. Patient Service Departments are... often called revenue centers
6. Direct Costs are... costs unique and exclusive to a depart-
ment
7. "Dollars in the Cost Pool" / "Total Volume of Allocation Rate
Cost Driver" =
8. Effective cost drivers should have what char- -Promote organizational cost reduc-
acteristics(s)? tion
-Perceived as being fair
9. is NOT a type of allocation method? Step-Up Method
10. As an Accounting Manager - you are responsi- -Square footage of the department
ble for allocating the cost of facilities to other -Housekeeping
departments. What would be an appropriate
cost driver
for you to use for this allocation?
11. TRUE/FALSE: Once a company uses the Direct False
Method to allocate costs to revenue-produc-
ing departments within the facility - the total
level of expenses decreases for the organiza-
tion.
LORD QUESTIONS AND
ANSWERS
, 1. Cost Driver is the... basis cost pool will be allocated
2. Cost Pool is the... overhead amount to be allocated
3. Overhead Departments are... often called cost centers
4. Indirect Costs Costs of shared resources used by the
entire organization
5. Patient Service Departments are... often called revenue centers
6. Direct Costs are... costs unique and exclusive to a depart-
ment
7. "Dollars in the Cost Pool" / "Total Volume of Allocation Rate
Cost Driver" =
8. Effective cost drivers should have what char- -Promote organizational cost reduc-
acteristics(s)? tion
-Perceived as being fair
9. is NOT a type of allocation method? Step-Up Method
10. As an Accounting Manager - you are responsi- -Square footage of the department
ble for allocating the cost of facilities to other -Housekeeping
departments. What would be an appropriate
cost driver
for you to use for this allocation?
11. TRUE/FALSE: Once a company uses the Direct False
Method to allocate costs to revenue-produc-
ing departments within the facility - the total
level of expenses decreases for the organiza-
tion.
