HSM 340 Week 8 Final Exam
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1. Question: (TCO 4) When would it make sense to use a flexible budget as compared to a forecast budget?
2. Question: (TCO 7) Explain the difference between a horizontal merger and a vertical merger.
3. Question: (TCO 1) Describe the Outpatient Code Editor.
4. Question: (TCO 1) What is the primary provision of the EMTALA.
5. Question: (TCO 3) Use the following data to calculate the variances in problem. data Your hospital has been approached by a major HMO to perform all their MS-DRG 470 cases (major joint procedures). They have offered a flat price of $10,000 per case. You have reviewed your charges for MS-DRG
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Question: (TCO 4) When would it make sense to use a flexible budget as compared to a forecast budget?
2. Question: (TCO 7) Explain the difference between a horizontal merger and a vertical merger.
3. Question: (TCO 1) Describe the Outpatient Code Editor.
4. Question: (TCO 1) What is the primary provision of the EMTALA.
5. Question: (TCO 3) Use the following data to calculate the variances in problem. data Your hospital has been approached by a major HMO to perform all their MS-DRG 470 cases (major joint procedures). They have offered a flat price of $10,000 per case. You have reviewed your charges for MS-DRG 470 during the last year and found the following profile: The HMO in the above example has indicated that their doctors use less expensive joint implants. If this less expensive implant is used, your medical supply charges would be reduced by $2,000. What is the estimated reduction in variable cost?
6. Question: (TCO 2) Explain the difference between the accrual basis of accounting and the cash basis of accounting.?
7. Question: (TCO 2) What are the double-entry accounting system and the duality concept? How are they related?
8. Question: (TCO 5) Define an annuity.
9. Question : (TCO 5) What avenues are available for for-profit healthcare providers to increase their equity position?
10. Question: (TCO 6) Describe the two major components of a working capital management
Budget management analysis is used by mangers as a tool and helps determine that all resources available are being used efficiently. The budgets are determined yearly and are based upon the previous year’s budget and variances. This paper will discuss specific strategies to manage budgets within forecast, compare five to seven expense results with budget expectations, describe possible reasons for variances, give strategies to keep results aligned with expectations, recommend three benchmarking techniques, and identify those that might improve budget accuracy, and justify the choices made.
The cash basis of accounting records revenues when cash is received and expenses when cash is paid out. The accrual basis of accounting records revenues when they are earned and expenses when resources are used.
Use of the flexible budget shows the budgeted operating income given the actual sales. When you compare the flexible budget to the actual budget you are able to compare the total sales and cost incurred given the same units sold. The sales price variance, which is the actual sales less the flexible budgeted sales, was $14,700 favorable. This means that actual sales were higher than budgeted sales at that usage. This is attributable to the increase in service price from $25 to $26.40. Price variance for material usage was $2,100 over the flexible budget projection. This could be attributed to overuse or waste of materials. As expected, the direct labor price variance was $3,375 lower than the flexible budget amount. This is attributed to the manager’s effective use of labor. Operating expenses were also higher than the flexible budget
For example interest rates, the cost of raw materials including fuel, the number of sales or orders that we make and in turn all of these rely on other factors. The best therefore that can be done when developing a budget is to look at all the factors that are likely to affect the budget and decide how to take account of each one. If there is a previous budget (last year or last month) then it is sensible to look at how this has been achieved or not as the case may be, and what factors affected the outcome. If we are looking at monthly budgets it might be a better comparison to look at the same month twelve months ago as well as the previous months. The more factors we take into consideration when estimating a budget, the more accurate our budget will be.
1.) What is the marginal cost estimate of the Phase 4 hospital services, assuming that 60 percent of the designated costs are fixed and the remaining costs are variable?
* Price Variance = 240.000-246.000 = $6000 Unfavourable. This reflects the increase in medical benefits noted by the accountant.
Question 5: Which type of variation was critical to resolving the realized revenue case study?
A flexible budget can be used to forecast a range of production possibilities, or it can be used to assess how well the company met the budget plan based
Accounting is commonly described as the language of business. It is very important for all business owners to have very good understanding of their finances. Having the knowledge of your business finance, you will know where the money is going. Every business owner should have a good understanding of finance. To have a good understanding business owners needs to understand basic accounting steeps, how does accounting play a role in their business, how to define a financial statement and how the omission of any of these steps would affect the success of a business. Once you have an understanding of accounting/finance and the how it plays
I have chosen the topic “Examine the financial characteristics of health care delivery along with managing costs, revenues, and human
Case II is a continuation of Case I. In this case you will convert the line-item budget developed in Case I into a functional budget. Then you will employ further information to create a flexible budget. Refer to the Case I Solution for data.
Double entry accounting is based on the fact that every financial transaction has equal and opposite effects in at least two different accounts. 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 bookkeeping or accounting makes it easier to accurately prepare financial statements directly from the books of account and detect errors.
3) Using the budget Data, what was the total expected cost per unit if all manufacturing and shipping overhead (both variable and fixed) were allocate to planned production? What was the actual cost per unit of production and shipping?
Traditional budgeting, according to Drury (2009), is a once in a year tradition where managers representing each department come together and draw up a total budget for the organization which details the cost that would be incurred for the upcoming year. Drury further goes on to claim how traditional budgeting has, on numerous occasions, been termed as inflexible and unpredictable as it is purely based on assumptions and speculations. A traditional budget lists incomes, subtracts expenses and then makes final adjustments to the budget. A study conducted by Bourne, Neely and Heyns (2002) on a number of companies that use traditional budgeting show that