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

Zero-based budgeting requires managers to justify every expense anew each period, eliminating automatic carryover of prior-year spending.

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

Total cost equals direct costs plus allocated overhead: $500,000 + $120,000 = $620,000.

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

The step-down method allocates support department costs to remaining support departments and patient care departments in a one-way cascade.

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 efficiency variance = (Actual hours – Standard hours allowed) × Standard rate, measuring productivity versus plan.

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

Flexible budget allowance = ($1,200,000/10,000) × 11,000 = $1,320,000; actual = $1,350,000 — wait, $1,320,000 − $1,350,000 = $30,000 unfavorable. Correct answer is $30,000 unfavorable.

(HAC) Healthcare Accounting Certification Practice Test

(HAC) Healthcare Accounting Certification Practice Test

HAC Healthcare Accounting Cost Management & Budgeting 2