Calculate the percent variance relative to surgical revenue

Reference no: EM131034918

1. Multiple Choice: Which of the following does not reflect efforts providers have enacted to control the costs of providing care:

a. Shifting to inpatient services
b. Implementing more sophisticated cost-accounting systems and information services technologies
c. Shifting to outpatient services
d. Mergers and acquisitions

2. Multiple Choice: A hospital offers several outreach and educational programs which positively impact the community in which it serves. Which of the following is not a reason why it would be in the organization's best interest to chronicle each initiative, quantifying community impact where possible?

a. Community benefit reporting
b. Tax exempt status justification
c. Justification of payment in lieu of tax levels
d. To justify management compensation

3. True/False: One of the advantages of a nonprofit organization compared with an investor-owned company is that the investor-owned company is subject to federal income taxes.

4. True/False: A hospital that is caring for a Medicare patient on an inpatient basis generally can increase its reimbursement by providing additional services.

5. Fill in the blank: The [x] from the statement of operations is closed out at the end of the period to [y] on the balance sheet.

6. Multiple Choice: 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):

a. Statement of Operations
b. Statement of Changes in Net Assets
c. Statement of Cash Flows
d. Balance Sheet

7. Multiple Choice: In class we learned that a dollar today is always worth more than a dollar tomorrow. Which selection does not support this position?

a. Inflation will increase the buying power of a dollar in the future
b. A dollar in hand today is certain whereas a dollar to be received in the future is not.
c. Investing a dollar today will allow for potentially greater returns that waiting to invest that same dollar in the future
d. A dollar in hand today can be used now to take advantage of opportunities that may present, as opposed to not having that dollar.

8. True/False: Cost allocation is a way to distribute costs from support departments to revenue-producing departments.

9. True/False: Fixed costs per unit change with respect to volume

10. Multiple Choice: The flexible budget attempts to improve the recognition of deviations caused by changes in:

a. Volume
b. Hours Worked
c. Prices
d. None of the above

11. Multiple Choice: Because prices are often fixed in the health care industry, it is increasingly important to:

a. Measure effectiveness
b. Measure efficiency
c. Control Costs
d. None of the above

12. Multiple Choice: A full-time technician working in the local Walk-In Clinic is paid $62,000 per year (52 weeks) and works 40.0 hours per week over 5 days. The fringe benefit rate is 31 percent. In 2011, a technician gets 8 holidays (Walk-In Closed), 5 sick days and 10 vacation days. What is the hourly rate of pay?

a. $28.75
b. $29.81
c. $29.00
d. $32.70

13. Multiple Choice: A full-time technician working in the local Walk-In Clinic is paid $62,000 per year (52 weeks) and works 40.0 hours per week over 5 days. The fringe benefit rate is 31 percent. In 2011, a technician gets 8 holidays (Walk-In Closed), 5 sick days and 10 vacation days. What is the fully "burdened" hourly rate of pay (i.e. the total cost per hour actually worked)?

a. $42.84
b. $32.70
c. $29.81
d. $45.00

14. Multiple Choice: A full-time technician working in the local Walk-In Clinic is paid $62,000 per year (52 weeks) and works 40.0 hours per week over 5 days. The fringe benefit rate is 31 percent. In 2011, a technician gets 8 holidays (Walk-In Closed), 5 sick days and 10 vacation days. How many full-time equivalent (FTE) technicians are required to staff the local Walk-In Clinic, 8 am to 7 pm on weekdays, and 9 am to 1 pm on Saturdays? Assume that two technicians must always be on duty during the clinic's hours of operation.

a. 3.1435
b. 1.5717
c. 2.5255
d. 3.5755

15. Multiple Choice: LGH, a non-taxpaying entity, is planning to purchase imaging equipment, including an MRI and ultrasonograms for its new imagining center. The equipment will generate $2,500,000 per year in revenues for the next five years. The expected operating expenses, excluding $800,000 in depreciation, will increase expenses by $950,000 per year for the next five years. The initial capital investment outlay for the imaging equipment is $4,500,000. The salvage value at year five is $500,000. The cost of capital is 9%. Compute the NPV.

a. $1,854
b. $4,500
c. $6,354
d. None of the above

16. Multiple Choice: LGH, a non-taxpaying entity, is planning to purchase imaging equipment, including an MRI and ultrasonograms for its new imagining center. The equipment will generate $2,500,000 per year in revenues for the next five years. The expected operating expenses, excluding $800,000 in depreciation, will increase expenses by $950,000 per year for the next five years. The initial capital investment outlay for the imaging equipment is $4,500,000. The salvage value at year five is $500,000. The cost of capital is 9%. Calculate the IRR. Select the closet answer.

a. 18.2%
b. 21.3%
c. 23.2%
d. 25.4%

17. Multiple Choice: The following are budgeted and actual results for Cutting Edge Surgery Center:

Surgical Volume: Budgeted 1,530, Actual Volume 1,152

Calculate the absolute (in volume units or dollars) variance relative to surgical volume.

a. -378 (unfavorable)
b. 1,530 (Favorable)
c. 378 (favorable)
d. -1,152 (Unfavorable)

18. Multiple Choice: The following are budgeted and actual results for Cutting Edge Surgery Center: Surgical Volume: Budgeted 1,530, Actual Volume 1,152. Calculate the percent variance relative to surgical volume.

a. -24.71% (Unfavorable)
b. 24.71% (Favorable)
c. 26% (Favorable)
d. -22% (Unfavorable)

19. Multiple Choice: The following are budgeted and actual results for Cutting Edge Surgery Center: Surgery Revenues: Budgeted $545,250, Actual Revenue $449,445. Calculate the absolute (in dollars) variance relative to surgical revenues.

a. -$95,805 (Unfavorable)
b. $95,805 (Favorable)
c. -$449,445 (Unfavorable)
d. $545,250 (Favorable)

20. Multiple Choice: The following are budgeted and actual results for Cutting Edge Surgery Center: Surgery Revenues: Budgeted $545,250, Actual Revenue $449,445. Calculate the percent variance relative to surgical revenue.

a. -17.57% (Unfavorable)
b. 17.57% (Favorable)
c. 16.52% (Favorable)
d. -16.52% (Unfavorable)

21. Fill-in the blank Calculation: The total cost of Radiology's Centralized Reception is $250,000. If this cost is allocated to the following revenue-producing departments by RVU volume, using the following RVU statistics, the indirect cost allocation (in dollars) for each department would be as follows: Diagnostic Radiology = [A], Ultrasound = [B], Nuclear Medicine = [C], CT Scan = [D], and Radiation Therapy = [E].

Diagnostic

Radiology

Ultrasound

Nuclear Medicine

CT Scan

Radiation Therapy

# of RVUs

119,000

93,000

38,000

62,000

74,000

22. Fill-in the Blank Calculation: Your nursing home defines output as a patient day. Its present volume is 26,000 patient days. The average cost per day is $90.00. Present revenues and costs are presented below: Assuming no profit is required, break-even in patient days (quantity) for this nursing home is [A].

Revenues:

Charge Patients (6,000 Patient Days) $750,000

Fixed-Price Patients (20,000 Patient Days) 1,800,000

Total Net Revenues 2,550,000

Costs:

Fixed Costs 1,170,000

Variable Costs ($45/PD) 1,170,000

Total ($90/PD) 2,340,000

Net Income $210,000

Reference no: EM131034918

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