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):
Question 1 (CO 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):
Report of management
Statement of cash flows
Income statement
Balance sheet
Statement of retained earnings
Question 2 (CO 2) Which method(s) of financial reporting does (do) not recognize the impact of changes in unrealized gains in replacement value?
HC-GPL and CV-GPL
CV and CV-GPL
HC and CV
HC and HC-GPL
Question 3 (CO 2) _____ is the most important financial metric to review to determine long-term financial viability.
Total margin
None of the above
Days cash on hand
Return on equity
Hospital cost index
Question 4 (CO 2) What should be a firm’s primary long-term financial objective?
Equity growth
Asset growth
Debt growth
Profit growth
Question 5 (CO 3) The breakeven point occurs where:
total revenue outpaces total avoidable fixed costs
total profit margin and total costs intersect
total fixed costs and total revenue intersect
total costs and total revenue intersect
total variable costs and total revenue intersect
Question 6 (CO 3) SKF Primary Care Clinic is deciding whether to purchase MRI equipment that would enable it to perform MRI imaging services in-house rather than sending its patients to its competitor’s hospital three miles away. From a financial position, if SKF were to make its decision without using net present value analysis, the clinic would need to know (or at least reasonably estimate) which of the following information?
Variable costs, volume, avoidable fixed cost, and total revenue
Revenue per unit, indirect costs, volume, and total revenue
Avoidable fixed costs, revenue per unit, volume, and contribution margin
Unavoidable fixed cost, volume, variable cost, and indirect costs
Total unit cost, indirect costs, profit, and volume
Question 7 (CO 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?
High prices
Low Medicare payment
High fixed costs of treatment
Low prices
Question 8 (CO 3) Which of the following is the first step in any budgetary process?
Define standard treatment protocols
Define volumes of patients
Define standard cost profiles
Define required departmental volumes
Question 9 (CO 4) Which of the following is part of a statistics budget?
Estimation methodology
Output expectations
All of the above
Responsibility for estimation
Question 10 (CO 4) Which budgetary issue causes the most strife in all areas of a health care organization?
Setting prices
Deciding whether to use a fixed or flexible budget
Setting volume levels
Allocation of indirect costs
Question 11 (CO 4) Because prices are often fixed in the health care industry, it is increasingly important to:
None of the above
Measure effectiveness
Measure efficiency
Control costs
Question 12 (CO 3) What is the main reason that relative value units (RVUs) often are used in health care?
RVUs are the optimal way to estimate the costs of the resources consumed by cost objects such as products and customers.
RVUs enable more accurate pricing.
Not all standard units show up in a standard treatment protocol.
Some departments or cost centers may have large numbers of outputs, which make individual costing very time consuming and expensive.
Question 13 (CO 5) Which of the following is considered a direct cost?
A tracebale cost
Standard cost profiles
Direct labor and material costs
All labor costs
Question 14 (CO 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):
Statement of cash flows
Statement of retained earnings
Income statement
Balance sheet
Report of management
Question 15 (CO 2) Which of the following is the BEST example of a financial metric?
Length of stay
Employee empowerment
Total margin
Accreditation by the Joint Commission on Accreditation of Healthcare Organizations
Degree of innovation
Question 16 (CO 7) Employee covered health plans are most likely to be?
HMOs.
PPOs.
High deductible health plans with a savings option.
Traditional indemnity plans
Question 17 (CO 7) Capitation plans are more common for physician payment because:
physicians want more risk in their payment plans.
they can better control utilization.
they are concerned about adverse selection.
physicians have larger reserves and can assume more risk.
Question 18 (CO 7) Employer premium costs for health care coverage are often lowest in which type of health plan:
High deductible health plans with savings options.
HMO
POS.
PPO.
Question 19 (CO 7) Suppose that AT&T had made an offer to acquire Merck Pharmaceuticals. Ignoring potential antitrust problems, this merger would be classified as a:
Vertical merger
Horizontal merger
Cross-border merger
Conglomerate merger
Question 20 (CO 1) Which of the following is an element of the charge master?
Charge/price
Charge code
CPT/HCPCS code
All of the above
Question 21(CO 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.)
Your hospital has been approached by a major HMO to perform all their MSDRG 505 cases (foot surgeries). They have offered a flat payment of $8,000 per case. You have reviewed your charges for MSDRG 505 during the last year and found the following profile:
Average Charge: $11,300
Average LOS: 4.5 Days
Cost/Charge Variable Cost %
Routine Charge $3,200 0.75 65
Operating Room 1,850 0.70 80
Anesthesiology 210 0.70 75
Lab 575 0.65 40
Radiology 275 0.65 50
Medical Supplies 3,220 0.60 85
Pharmacy 955 0.55 85
Other Ancillary 1,015 0.75 55
Total Ancillary $8,100 0.70 75
$3,892
$8,070
$5,213
$7,613
$5,452
Question 22 (CO 6) Sunrise has received an invoice for medical supplies for $5,000 with terms of a 3% discount if paid within 10 days. The invoice is due on the thirtieth day. What is the annual effective cost of interest on this invoice?
5.4%
27%
65
36%
54%
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