HAC Healthcare Accounting Cost Management & Budgeting 2

Question 1

Which budgeting method requires each department to justify all expenditures from scratch each budget cycle rather than using prior year figures as a baseline?

Accepted Answer

Zero-based budgeting

Answer

Incremental budgeting

Answer

Rolling budgeting

Answer

Activity-based budgeting

Question 2

A hospital's pharmacy department has direct costs of $500,000 and is allocated $120,000 in overhead. What is the pharmacy's total cost?

Accepted Answer

$620,000

Answer

$380,000

Answer

$500,000

Answer

$720,000

Question 3

In healthcare cost management, a 'step-down' cost allocation method allocates costs in what order?

Accepted Answer

Support departments to other support and patient care departments sequentially

Answer

Patient care departments first, then support departments

Answer

Equally across all departments simultaneously

Answer

Only to revenue-generating departments

Question 4

Which variance measures the difference between actual hours worked and standard hours allowed, multiplied by the standard wage rate?

Accepted Answer

Labor efficiency variance

Answer

Labor rate variance

Answer

Volume variance

Answer

Spending variance

Question 5

A healthcare organization budgets $1,200,000 for supplies for 10,000 patient days. Actual patient days are 11,000 and actual supply cost is $1,350,000. What is the flexible budget variance for supplies?

Accepted Answer

$30,000 favorable

Answer

$30,000 unfavorable

Answer

$150,000 unfavorable

Answer

$150,000 favorable

Question 6

Which of the following best describes a 'responsibility center' in healthcare budgeting?

Accepted Answer

An organizational unit whose manager is held accountable for specific financial outcomes

Answer

A government agency that regulates hospital spending

Answer

A committee that approves capital expenditure requests

Answer

A cost pool used for overhead allocation

Question 7

When a hospital uses a 'charge master' rate that is significantly higher than actual reimbursement received, the difference is recorded as:

Accepted Answer

Contractual adjustment (deduction from revenue)

Answer

Bad debt expense

Answer

Operating expense

Answer

Deferred revenue