LSUS MHA 706 FINAL - LORD Questions with CORRECT Answers (Grade A+)

LSUS MHA 706 FINAL - LORD Questions with
CORRECT Answers (Grade A+)

Question 1:
Cost Driver is the...
Answer:
basis cost pool will be allocated

Question 2:
Cost Pool is the...
Answer:
overhead amount to be allocated

Question 3:
Overhead Departments are...
Answer:
often called cost centers

Question 4:
Indirect Costs
Answer:
Costs of shared resources used by the entire organization

Question 5:
Patient Service Departments are...
Answer:
often called revenue centers

Question 6:
Direct Costs are...
Answer:
costs unique and exclusive to a department

,Question 7:
"Dollars in the Cost Pool" / "Total Volume of Cost Driver" =
Answer:
Allocation Rate

Question 8:
Effective cost drivers should have what characteristics(s)?
Answer:
-Promote organizational cost reduction -Perceived as being fair

Question 9:
__________ is NOT a type of allocation method? Step-Up Method
Answer:
not provided in source.

Question 10:
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

Question 11:
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

Question 12:
When using the direct cost allocation system often you are allocating the cost of __________ to Patient
Service Departments.
Answer:
Support (overhead) Departments

, Question 13:
__________ 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)

Question 14:
__________ 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.

Question 15:
Activity Based Costing (ABC) begins with _________ that comprise the service provided.
Answer:
Individual Activities

Question 16:
Calculate...
Answer:
total costs of the service by aggregating activity costs

Question 17:
Estimate...
Answer:
cost of each activity

Question 18:
Collect...
Answer:
activity data for each service