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1. A hospital outpatient clinic occupying a 60,000 foot building has an annual d

ID: 2666802 • Letter: 1

Question

1. A hospital outpatient clinic occupying a 60,000 foot building has an annual depreciation expense for the structure of $1,000,000. The clinic laboratory occupies 20% of the structure. The $200,000 depreciation expense for the lab annual budget is classified as:
a. direct and fixed
b. direct and variable
c. indirect and fixed
d. indirect and variable

2. Revenue per unit is $200, variable cost per unit is $100 and total fixed costs are $200,000. The breakeven in units is
a. 2,000
b. 1,000
c. 2
d. cannot be determined from the above information

3. A for-profit nursing home has beginning of period earning os $50,000. Net income for the period totals $50,000 and dividends declared during the period total $10,000. The balance sheet total for retained earnings will be what amount?
a. $100,000
b. $75,000
c. $90,000
d. $130,000

4. Which of the following measures is not used directly as one of the means of determining the reasonableness of a hospital's charges?
a. Patient Demographics
b. ROI
c. Costs
d. Investment level

Explanation / Answer

1. A hospital outpatient clinic occupying a 60,000 foot building has an annual depreciation expense for the structure of $1,000,000. The clinic laboratory occupies 20% of the structure. The $200,000 depreciation expense for the lab annual budget is classified as


a. direct and fixed


2. Revenue per unit is $200, variable cost per unit is $100 and total fixed costs are $200,000. The breakeven in units is

BEP = total fixed costs/( Revenue per unit - variable cost per unit)

         = 200000/(200-100)

        = 200000/(100)

        = 2000


a. 2,000


3. A for-profit nursing home has beginning of period earning os $50,000. Net income for the period totals $50,000 and dividends declared during the period total $10,000. The balance sheet total for retained earnings will be what amount?

beginning of period

$50,000

Add

Net income for the period totals

$50,000

Total

$100,000

Less

dividends declared during the period

$10,000

Total

$90,000


c. $90,000



4. Which of the following measures is not used directly as one of the means of determining the reasonableness of a hospital's charges?


a. Patient Demographics

beginning of period

$50,000

Add

Net income for the period totals

$50,000

Total

$100,000

Less

dividends declared during the period

$10,000

Total

$90,000