Management Accounting for Healthcare

are those that cannot be recovered by future actions of the organization

are the result of past purchases or contracts

are never relevant to decisions about the future

all of the above

True

False

step down allocation only uses a single basis for each service department.

reciprocal allocation can allocate the costs of a greater number of service departments.

reciprocal allocation makes allocations to all the departments that use each service departments outputs.

‘a’ and ‘b’ above.

are characteristic of the decision maker that that affect the decision that will be made.

are characteristics of the outcomes that serve as criteria for deciding on a specific solution

are variables that do not need measurements that can be converted to numbers in order to arrive at a decision

demand monetary measurement.

are activities conducted in service departments that incur service department costs

determine the separable activities performed in a service center.

are activities conducted in service-using departments that directly cause separable service department activities to be performed.

relate product center overhead costs to the cost of a unit of the center’s output.

are used when activity drivers do not exist.

are based on the logical association of a product center variable to a category of overhead.

can use cost behavior analysis to check their accuracy.

all of the above.

to inform people outside the organization about the financial position of the organization.

to hide the lack of sufficient assets to maintain the financial position of the organization.

to identify, measure and communicate economic information to support decisions.

to report sequences of actions intended to take the organization to its objectives.

True

False

True

False

require prioritizing attributes.

require threshold values of acceptance for each attribute.

use relative weights assigned to each attribute.

can not handle attributes measured on a nominal scale.

True

False

usually produce a single service.

may perform different activities that each use their own set of resources.

Have outputs that are not related to cost drivers.

none of the above.

analyst should be unobserved.

analyst should observe long enough to be exposed to all of the centers activities.

only one analyst should be used.

‘a and ‘b’ are both correct

involves placing the right person into each position within the organization chart.

is based on the concept of specialization.

is best left to organization’s board of directors.

is independent of the skill sets and long term assets used by the organization.

True

False

produces a product that is a direct input to another product.

produces a product that is sold

produces a service that is an overhead cost to other centers.

‘a’ and ‘b’ are both correct.

resource utilization and costs

resource prices

personnel placement and labor prices

sales volume and sales prices

True

False

the total performance and financial status of the organization.

information on the relative cost of the organization’s various outputs.

information on the relative profitability of the organization’s various products.

‘b’ an ‘c’ above.

combine attribute scores in such a way a decision high quality decision results.

tell the decision maker how attributes were selected.

eliminate the need for weighting of attributes

none of the above.

creating such centers large enough to efficiently produce all inputs to their outputs.

eliminating the allocation of sustaining overhead costs to them.

establishing transfer prices

all of the above

if the behavior approximates a straight line relationship.

if the fit appears to be adequate

representative points for analysis computation.

‘a’ and ‘b’ above

the variable cost of the additional output is a marginal cost.

the fixed cost associated with the increased output can be marginal costs

the fixed cost associated with the increased output can not be marginal costs.

‘a’ and ‘b’ are both correct

job order costing

process costing

operational costing

none of the above

the individual care interventions it provides to patients.

the services it provides to admitting physicians.

the outputs for which it is paid.

the services it provides to the community.

True

False

the producing center’s performance measures.

the buying center’s performance measures.

the organization as a whole.

none of the above.

can be isolated within service centers

have outputs that are used by other centers in roughly equal proportions.

share costs with other activities performed within their service center

all of the above

the provider assumes to know the cost of specific services or interventions that it provides

the provider assumes to know the average set of services or interventions that will be used for patients in various categories.

the provider assumes to know the number of patients it will receive in each category from the capitated population.

all of the above

True

False

with large samples it is faster to do

it places the regression line more accurately within the data set.

it gives a quantitative measure of the fit

all of the above

job order costing

process costing

operational costing

none of the above

true costs

joint costs

standard costs

variable costs

they create mutual stimulation of thought among the members.

they can create consensus on important points.

they tend to produce more comprehensive insights.

all of the above

admits that the organization does not know the relative cost of its different outputs.

assumes that products have been priced at what the market will bear.

prevents specific products from being over or under priced.

none of the above.,

are costs that are permanently sustained by the organization.

are related to the capacity of long term assets

are irrelevant to the organization’s long tem profitability.

do not affect total cost per unit of output.

make estimating the future cost per unit of output less difficult

are becoming a decreasing fraction of total hospital costs.

can be separated from variable cost by doing cost behavior analysis

are never marginal costs

things that cause a cost creating activity to be performed.

demand cost behavior analysis in order to be identified.

are always measured in monetary units.

all of the above.

uses predetermined normative measures accepted by accounting executives throughout the health care industry.

attempts to discover how specific decision makers go about making specific types of decisions.

demands long-term strategic planning.

demands a clearly structures organization chart.

True

False

the output of the activity can be traced to the specific cost targets that use it and it is supervised by single individual.

the output of the activity can be traced to the specific cost targets that use it and the activity’s cost is essentially distinct from those of other separable activities.

the output of the activity can be traced to the specific cost targets that use it and it is not used by other service centers.

the activity’s cost are essentially distinct from those of other activities and it and it is supervised by a single individual.

a service center

a product center

a profit center

a department

always has a single cost driver

can be driven by multiple cost drivers

includes the cost of all activities that must precede it.

‘b’ and ‘c’ are both correct.

organization charts and procedure manuals

procedure manuals and job descriptions.

job descriptions and organization charts.

organization charts and the general ledger.

the provider assumes to know the cost of specific services or interventions that it provides

the provider assumes to know the average set of services or interventions that will be used for patients in each category.

the cost of specific services or interventions used to care for the patient are irrelevant.

the responsibility for product selection and pricing decisions are removed from the management of the provider organization.

allocations of organization sustaining overhead.

product overhead that is traceable to the center;

direct cost of the centers outputs

all of the above

are normally included as part of product costing

are commonly categorized as period costs.

do not affect organization financial performance.

none of the above

True

False

True

False

are constructed when activity drivers can not be found

depend on a logical relationship between the amount of a factor within the using centers to the amount of the separable activity provided to them by the service center.

can not be used to allocate separable service activity costs to cost targets in the same way that activity drivers are used.

‘a’ and ‘b’ are both correct.