devry hsm340 midterm exam

Midterm Exam page 1

Question 1.1. (TCO 4) Budgets normally cover a period of: (Points : 5)

5 years

2 years

3 years

1 year

Question 2.2. (TCO 4) Which budgetary issue causes the most strife in all areas of a health care organization? (Points : 5)

Setting volume levels

Setting prices

Allocation of indirect costs

Deciding whether to use a fixed or flexible budget

Question 3.3. (TCO 4) Efficiency is a relationship between: (Points : 5)

Outputs and organizational goals

Inputs and outputs

Inputs and organizational goals

None of the above

Question 4.4. (TCO 3) Which of the following is the first step in any budgetary process? (Points : 5)

Define standard treatment protocols

Define required departmental volumes

Define standard cost profiles

Define volumes of patients

Question 5.5. (TCO 3) Assume that the clinic used the price that they need to exactly break even at 10,000 shots. Fewer people than expected showed up and purchased the flu shot. The clinic would: (Points : 5)

earn a profit.

have a loss.

break-even.

have a reduced unit contribution margin.

none of the above.

Question 6.6. (TCO 2) A statement that reports inflows and outflows of cash during the accounting period in the categories of operations, investing, and financing, is called a(an): (Points : 5)

Income statement

Statement of retained earnings

Balance sheet

Statement of cash flows

Report of management

Question 7.7. (TCO 2) _____ is the most important financial metric to review to determine long-term financial viability. (Points : 5)

Return on equity

Total margin

Days cash on hand

Hospital cost index

None of the above

Midterm Exam page 2

Question 1. 1. (TCO 4) What is the amount of variance that can be attributed to the difference between budgeted and actual volume?

Use the following data to calculate the variances.

The following information has been prepared for a home health agency.

BudgetActual

Wage Rate per Hour $16.00 $17.00

Fixed Hours 320 320

Variable Hours per Relative

Value Unit (RVU) 1.0 1.1

Relative Value Units (RVUs) 1,000 1,200

Total Labor Hours 1,320 1,640

Labor Costs $21,120$27,880

Cost per RVU $21.12 $23.23

Budgeted costs at actual volume would be $25,344 ($21.12 × 1,200), and the total variance to be explained is $2,536 Unfavorable ($27,880 - $25,344). Be sure to specify whether the variance is favorable or unfavorable. (Points : 5)

Question 2. 2. (TCO 2) Explain the difference between the accrual basis of accounting and the cash basis of accounting.? (Points : 10)

Question 3. 3. (TCO 2) What is an accounting entity? (Points : 10)

Question 4. 4. (TCO 1) What are social responsibility and ethics as they relate to business-oriented organizations? How should social responsibility and ethics affect the decisions of even for-profit companies? (Points : 20)

Question 5. 5. (TCO 2) Define and describe the purpose of fund accounting (now called net assets). (Points : 20)