HSM 340 MIDTERM EXAM QUESTIONS AND ANSWERS( COMPLETE SOLUTION)

HSM 340 MIDTERM EXAM Question 1.1. (TCO 4) Which of the following is part of a statistics budget? (Points : 5) Output expectations Responsibility for estimation Estimation methodology All of the above ...

HSM 340 MIDTERM EXAM Question 1.1. (TCO 4) Which of the following is part of a statistics budget? (Points : 5) Output expectations Responsibility for estimation Estimation methodology All of the above 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) Effectiveness 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) Estimate the total variable cost (i.e., including both routine and ancillary) per MSDRG 505 using the departmental cost/charge ratios and variable cost percentages. (Your answer might be slightly different due to rounding. Pick the closest.) (Points : 5) $5,213 $3,892 $7,613 $5,452 $8,070 Question 5.5. (TCO 3) Your controller has told you that the marginal profit of DRG 209 (major joint procedure) for a Medicare patient exceeds the marginal profit for an average charge patient. Why might this occur? (Points : 5) High fixed costs of treatment Low Medicare payment High prices Low prices Question 6.6. (TCO 2) A statement that reports the financial position (assets, liabilities, and stockholders' equity) of an accounting entity at a point in time is called a(an): (Points : 5) Income statement Statement of retained earnings Balance sheet This study soSutracetewmasednotwonflocaadsehd bflyo1w00s000822442696 from CourseHero.com on 01-08-2022 20:57:38 GMT -06:00 Report of management Question 7.7. (TCO 2) Which of the following is the BEST example of a financial metric? (Points : 5) Degree of innovation Employee empowerment Accreditation by the Joint Commission on Accreditation of Healthcare Organizations Total margin Length of stay 1. (TCO 4) Based on the below information, what dollar effect did the increased admission rate have on cost? You have been asked by management to explain the variances in costs under your inpatient capitated contract. The following data is provided. Use the following data to calculate the variances. Budget Actual Inpatient Costs $12,568,500 $16,618,350 Members 42,000 42,000 Admission Rate 0.070 0.095 Case Mix Index 0.90 0.85 Cost per Case (CMI = 1.0) (Points : 10) $4,750 $4,900 Question 2.2. (TCO 4) Based on the information below, what rate must be set to generate the required $80,000 in profit in the preceding example? You have been asked to establish a pricing structure for radiology on a per-procedure basis. Present budgetary data is presented below: Budgeted Procedures $10,000 Budgeted Cost $400,00 0 Desired Profit $80,000 It is estimated that Medicare patients comprise 40 percent of total radiology volume and will pay on average $38.00 per procedure. Approximately 10 percent of the patients are cost payers. The remaining charge payers are summarized below: Payer Volume% Discount% Blue Cross 20 4 Unity PPO 15 10 Kaiser 10 10 Self Pay 5 40 This study source was downloaded by 100000822442696 from CourseHero.com on 01-08-2022 20:57:38 GMT -06:00 50% (Points : 10) Question 3.3. (TCO 4) What is the amount of variance that is attributed to the change in labor productivity? Use the following data to calculate the variances. The following information has been prepared for a home health agency. Budget Actual Wage Rate per Hour $16.00 $17.00 Fixed Hours 320 320 Variable Hours per Relative 1.0 1.1 Value Unit (RVU) Relative Value Units (RVUs) 1,000 1,200 Total Labor Hours 1,320 1,640 Labor Costs $21,12 0 $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) DL Rate Variance = ( SR ? AR ) × AH Where, SR is the standard direct labor rate AR is the actual direct labor rate AH are the actual direct labor hours DL Rate variance = 1640*(16-17) = -$1640 unfavorable Question 4.4. (TCO 2) How are revenues and expenses defined under accrual accounting? (Points : 5) A system of accounting based on the accrual principal, under which revenue is recognized (recorded) when earned, and expenses are recognized when incurred. Totals of revenues and expenses are shown in the financial statements (prepared at the end of an accounting period), whether or not cash was received or paid out in that period. Accruals basis accounting conforms to the provisions of GAAP in preparing financial statements for external users, and is employed by most companies except the very small ones (which use cash basis accounting) Read more: http://www.businessdictionary.com/definition/accrual-basis-accounting.html#ixzz3bPbUH3gB Question 5.5. (TCO 2) What are the double-entry accounting system and the duality concept? How are they related? (Points : 5) DEFINITION of 'Double Entry' The fundamental concept underlying present-day bookkeeping and accounting. Double entry accounting is based on the fact that every financial transaction has equal and opposite effects in at least two different accounts. It is used to satisfy the equation Assets = Liabilities + Equity, whereby each entry is recorded so as to maintain the relationship. INVESTOPEDIA EXPLAINS 'Double Entry' In the double entry system, transactions are recorded in terms of debits and credits. Since a debit in one account will be offset by a credit in another account, the sum of all debits must therefore be exactly equal to the sum of all credits. The double-entry system of Thbios ostkukdyeesopuinrcge worasadcocwonulonatdinedgbmy 1a0k0e0s00it82e2a4s4ie26r9t6ofarocmcuCroautresleyHperroe.cpoamreonfi0n1a-n08c-i2a0l2s2ta2t0e:5m7:e3n8tGs MdiTre-c06tl:y00from the books of account and detect errors. Read more: http://www.investopedia.com/terms/d/double-entry.asp#ixzz3bPc8y6hK Follow us: @Investopedia on Twitter