The above statements are true or false questions. Please answer if the statement

Question

The above statements are true or false questions. Please answer if the statements are true or false.

5. It is more complex to calculate the full costs of a day of hospital care than it is to calculate the full costs of an episode of illness. 6. From an accounting perspective, a smaller number of cost centers allows for a more accurate calculation of the costs of a program or service. 7. Unlike a support center, mission centers generally do not earn revenues. 8. While direct costs are unambiguously associated with one specific cost center, indirect costs apply to more than one cost center. 9. Under the step-down method, changes to the sequence in which support center costs are allocated may result in changes to the total support center costs allocated to each mission center. 10. When all units of output are different, such as in a hospital, a process system can result in unfair prices to consumers

Explanation / Answer

5 TRUE because hospital has different output units whereas episode of illness is an unit output. 6 FALSE because more the cost centers, the more accurate and refined costs calculation 7 FALSE because support center either be expense or revenue centre, likewise mission centers also have revenue towards the mission. 8 FALSE because direct costs are associated with cost center where indirect costs applies to more than one profit centers (not cost center). 9 FALSE because every support center has different service ratios to departments, so different sequence will allocate differently. 10 FALSE because when all units of output are different, the cost ascertainment also become difficult, so unfair pricing to consumers takes place.

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