HAC Healthcare Accounting Cost Management & Budgeting 3

Question 1

Which cost behavior pattern describes costs that remain fixed within a certain range of activity but jump to a higher fixed level when activity exceeds that range?

Accepted Answer

Step-fixed costs

Answer

Step-fixed (step costs) remain constant within relevant ranges but increase in steps as activity levels cross thresholds, like hiring an additional nurse when census rises.

Question 2

A clinic's operating room has fixed costs of $800,000 and variable costs of $200 per procedure. If 4,000 procedures are performed, what is the total cost?

Accepted Answer

$1,600,000

Answer

Total cost = Fixed + Variable = $800,000 + ($200 × 4,000) = $800,000 + $800,000 = $1,600,000.

Question 3

In healthcare cost accounting, the 'relative value unit' (RVU) is primarily used to:

Accepted Answer

Allocate physician compensation and resource consumption

Answer

RVUs quantify the resources (work, practice expense, malpractice) associated with a service, used for physician compensation models and cost allocation.

Question 4

Which budgeting approach produces a new 12-month budget each month by adding a new future month as the most recent month expires?

Accepted Answer

Rolling (continuous) budgeting

Answer

Rolling (continuous) budgeting maintains a constant forward-looking horizon by adding a new period as each period closes.

Question 5

A hospital is evaluating two cost drivers for overhead allocation. Driver A explains 85% of overhead cost variation; Driver B explains 60%. Which should be preferred and why?

Accepted Answer

Driver A, because it has higher explanatory power (R²)

Answer

The cost driver with the highest R² (explanatory power) produces the most accurate cost allocations; Driver A at 85% is superior.

(HAC) Healthcare Accounting Certification Practice Test

(HAC) Healthcare Accounting Certification Practice Test

HAC Healthcare Accounting Cost Management & Budgeting 3