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What are the positive effects of managed care on our healthcare system Answer

What are the positive effects of managed care on our healthcare system? What are some of the problems created by managed care that have been identified by patients, providers, and interest groups?

The positive effects of managed care are; managing a person health care along with controlling cost. When one person follows the patients health and controls where they go and what they do and what medications they take it allows a patient to receive controlled health care along with cost control. They have to get referrals to other providers and when the provider sees the patient the provider must write back to the gatekeeper to keep them informed of the care necessary for their patient. The patient is somewhat safer in a way when one person is following their entire care plan.

Managed care was a gatekeeper where one provider followed your care and you needed a referral to see anyone else. Whereas Medical home is where you receive all your medical care or most of your medical care within that home. There are many providers who work within your medical home and see those providers so it is a little different. The Patient Centered Medical Home is a care delivery model whereby patient treatment is coordinated through their primary care physician to ensure they receive the necessary care when and where they need it, in a manner they can understand. The objective is to have a centralized setting that facilitates partnerships between individual patients, and their personal physicians, and when appropriate, the patient’s family. Care is facilitated by registries, information technology, health information exchange and other means to assure that patients get the indicated care when and where they need and want it in a culturally and linguistically appropriate manner.

http://www.acponline.org/running_practice/delivery_and_payment_models/pcmh/understanding/what.htm

Managed care has introduced changes, such as cost effectiveness, access to care, and quality of care, to many components of the U.S. healthcare delivery system. These changes have affected how healthcare administrators and clinical practitioners perceive the impact of managed care on healthcare delivery practices. A survey was initiated to explore whether the perceptions of administrators differed from those of practitioners and to discover which organizational variables could explain the difference. A descriptive, cross-sectional survey design was used for the target population of administrators and practitioners in high, moderate, and low managed-care-penetration markets. Two investigator-developed instruments–the Managed Care Perceptions Inventory (MCPI) and the MCPl-Demographic–and an intact centralization of decision-making assessment subscale were used for data collection.

http://www.highbeam.com/doc/1G1-109666202.html

Managed care has been known to be used very differently from primary care. The trends in the 1990s were that under the guise of care coordination, turned many providers of primary care into gatekeepers who, in fact, mostly denied care. Managed care was a concept which took awhile for people to understand. We were used to seeing who we wanted and getting care from any provider at any time. When managed care came a long it was difficult to have one person in charge of our medical care. We had to see the doctor in order to get a referral to see another doctor. It was a tough concept to grasp. However, millions are on managed care programs now, and many more are enrolled in PPO plans, so they have more control over where they can go with a little more cost involved. Managed care is a great program for people who need cheaper medical care, where as PPO plans are HMO with a little more benefits that cost more if you prefer to out of network.

Source of the Problem: Employer Provision of Insurance. It is self-evident that the interests of the employer are different from those of the employees. Employers, of course, compete for workers in the labor market by offering fringe benefits in addition to wages. And the more generous the employer’s health insurance, the more attractive the job. But the employer’s primary interest is in healthy employees. Other things being equal, no employer has an incentive to advertise that the company health plan has excellent coverage for alcoholism and drug abuse, chronic conditions or other expensive-to-treat diseases.

Source of the Problem: Perverse Incentives for Insurers. In today’s environment, individuals are often able to exercise choice among options created by an employer or plans competing in a regulated market. However, many health plans are required to charge the same premium to every applicant, regardless of expected health care costs. Under this one-price-for-all rule, the premiums sick people pay are well below the expected cost of their treatment, while the premiums of healthy people are substantially higher.

As a result, health plans face extremely perverse incentives to avoid the sick and attract the healthy. Indeed, plans that attract a disproportionate number of sick people eventually fail and leave the market. But since health plans cannot discriminate among enrollees on the basis of price, they tend to make quality adjustments instead. Specifically, each plan has an incentive to underprovide services to the sick and overprovide services to the healthy.

Solution: Individually Owned Insurance. Most people with private health insurance obtain it through an employer. The reason is the federal tax law, which excludes employer premiums from the employee’s taxable income. This tax subsidy can reduce the cost of health insurance by 30 percent or more for an average-income family. By contrast, individuals who purchase their own insurance receive little or no tax relief. In addition to encouraging employer-based health insurance, the current system encourages waste. Since an extra dollar of earnings can be used to buy a dollar’s worth of health insurance as an alternative to 70 cents of take-home pay, employees have an incentive to obtain too much health insurance, covering items that could have been purchased more efficiently out of pocket or might not have been purchased at all. We propose a neutral tax policy that eliminates these distortions.

 

As an alternative to employer-provided health insurance, employees should be able to purchase their own insurance and get similar relief under the tax law. They should get a tax credit that encourages them to purchase “bare bones” catastrophic insurance – leaving them free to purchase additional coverage with their own money. Employers should be able to help employees obtain individually owned insurance by supplying information, negotiating group discounts, etc.

The advantages of these proposals are clear:

  • Employees would be able to purchase insurance tailored to their needs, rather than insurance selected by their employer.
  • People would have portable insurance that travels with them on their journey through the job market.
  • Tax relief would extend to the self-employed and others who do not have employer-provided coverage.
  • The limited tax subsidy would assure that the purchaser, rather than taxpayers, would bear the full cost of extra, nonessential coverage.
  • Those who want to continue under the current system would be free to do so.

Solution: A New Medical Savings Account. Although current tax law subsidizes the payment of employer-based third-party insurance premiums, it provides virtually no tax relief to those who self-insure by putting funds aside to pay medical bills directly. Thus the tax law encourages us to turn over all of our health care dollars to a third-party manager. The exceptions are two MSA pilot programs – one for the elderly on Medicare and the other for small businesses and the self-employed. Yet these tax-advantaged MSAs are inadequate to deal with the challenge of managed care for three reasons:

  • Contributions to tax-free (pilot project) MSAs can be made only by those with high-deductible plans – thus excluding enrollees in HMOs and most other managed care plans.
  • The MSA deposit is mainly designed to pay deductible expenses and is exhausted at the point where third-party (often managed care) payment takes over.
  • After the insurance period (usually one year), withdrawals from the MSA face taxes and penalties unless they are used to purchase medical care – a feature that forces the MSA to operate less like real self-insurance and more like prepayment for the consumption of medical care.

To remedy these defects and give MSAs more flexibility, we propose to make the tax law more neutral with respect to the use and withdrawal of MSA funds. Specifically:

 

  • People who take advantage of the new tax credit should be able to make deposits to a new type of Medical Savings Account.
  • The new MSA is designed to wrap around third-party insurance – providing funds with which to pay any uninsured medical expense. [See the diagram.]
  • Deposits to the MSA would be made with aftertax funds, and withdrawals for any reason would be tax-free.
  • Like the previous set of proposals, these would create a new option without taking away any current option.

Again, the advantages of these proposals are clear:

  • Enrollees in HMOs and other managed care plans would be able to make MSA deposits and use the funds to pay nonnetwork doctors and purchase diagnostic tests and other services not covered by their health plan.
  • Employers and insurers would have much more flexibility in designing plans; for example, they could provide first-dollar coverage for some services (e.g., preventive tests with proven payback) and high deductibles for others (e.g., general checkups) without jeopardizing the ability of the insured to have an MSA.
  • A special type of fee-for-service plan – one that pays fixed fees for services and procedures – would become more viable because if the scheduled fee proved insufficient, people could use their MSA funds to pay the difference.
  • Because MSA withdrawals would be tax-free, people could make risk-free MSA deposits – secure in the knowledge that they could have their money back without penalties if they had no medical expenses.
  • Because MSA withdrawals would be tax free, people in future periods could make unbiased choices among medical care, other goods and services and personal savings.

These proposals – if implemented – would change the ways the private marketplace responds to the perceived deterioration of health care quality that has emerged with managed care.

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ACC 491 Week 1 DQ 1 Answer

The American Institute of Certified Public Accountants (AICPA) and the Institute of Internal Auditors (IIA) have positioned the auditing professions to become “assurance professions.” What is the difference between assurance services, attestation services, and auditing services? What are the economic issues that drive the increased demand for assurance services? What is one assurance engagement and one attestation engagement other than an audit of financial statements? What are the differences between the two?

 

The American Institute of Certified Public Accountants (AICPA) and the Institute of Internal Auditors (IIA) have positioned the auditing professions to become “assurance professions”. What is the difference between assurance services, attestation services, and auditing services?

Attestation services involve providing written conclusions that attest to the reliability of written information used by third parties. Assurance services are independent professional services that improve the quality of information, or its context, for decision makers. Both assurance services and attestation services are two of a much broader range of auditing activities. Auditing is a systematic process that uses logical, structured, and organized procedures to objectively obtain and evaluate evidence that regards assertions made by management about economic actions and events to ascertain the accuracy of the assertions and established criteria, which is then communicated to interested users.

The result achieved from attestation is a written conclusion about whether or not a company’s written assertions are reliable. The results achieved from assurance services is to provide better information for decision makers. The objective of attestation is reliable information, the objective of assurance is better decision making.

What are the economic issues that drive the increased demand for assurance services? The economic issues that drive the increased demand for assurance services include many traditional demands that first helped the auditing profession to immerge; i.e. growth in all sectors, the will for prosperity, corporate mergers, and business moving from the private sector to the public sector. Perhaps the most current economic issues that lead the demand for assurance services are policies that corporations must follow. An example that comes to mind is the recent policies put in to place for lending institutions.

What is one assurance engagement and one attestation engagement other than an audit of financial statements? An assurance engagement would be a CPA paid by the preparer or user, while an attestation engagement would be a CPA paid for by the preparer. http://www.phxcpas.net/difference-between-assurance-attestation-and-auditing-services/2010/06/

Response 2

Assurance services are independent professional services that improve the quality of information, or its context, for decision makers. An attest service is one in which the CPA firm issues a written communication that expresses a conclusion about the reliability of a written assertion that is the responsibility of another party. Both assurance services and attestation services are two of a much broader range of auditing activities. Auditing is a systematic process that uses logical, structured, and organized procedures to objectively obtain and evaluate evidence that regards assertions made by management about economic actions.

The economic issues that drive the increased demand for assurance services include many traditional demands that first helped the auditing profession to immerge; i.e. growth in all sectors, the will for prosperity, corporate mergers, and business moving from the private sector to the public sector. Perhaps the most current economic issues that lead the demand for assurance services are policies that corporations must follow. An example that comes to mind is the recent policies put in to place for lending institutions. An assurance engagement would be a CPA paid by the preparer or user, while an attestation engagement would be a CPA paid for by the preparer.

References:

Boynton, W. C., & Johnson, R. N. (2006).Modern auditing: Assurance services and the integrity of financial reporting. (8th ed.). Hoboken, NJ: Wiley.

Louwers, T., Ramsay, R., Sinason, D., &Stawser, J. R..(2007). Auditing and assurance services. New York, NY: McGraw-Hill.

Phoenix accountant (2012) retrieved from http://www.phxcpas.net/difference-between-assurance-attestation-and-auditing-services/2010/06/

 

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HCS 320 Week 3 Health Care Process Answer

Health Care Communication Process:

Electronic Medical Records

Organization:

Long-Term Care

Target Audience:

New Hires

Electronic Medical Records

Team Cbelieves that Electronic medical records are the future of health care. Information is the staple of any health care facility and the ability to speed up a process can only help provide efficient medical care. While we study to process of electronic records we will be able to implement a structured order that will supply information on patients and staff members that will help with process of caring for the health of our company’s patients.We believe adopting electronic records to our program we can make healthcare more efficient for providers while improving the quality of care for patients. Electronic records have critical information of patients such as medical history, care plans, test results, and medication prescriptionsthat can be accessed quickly to reduce the number potential errors.Team C believes that personal information should be updated to help understand a patient’s condition when it comes to the doctor analysis but also to help the physician learn more about the patient’s state of health for future references. The electronic medical records allow the patients to have more access to their personal information along with the doctors and specialists at the time of a routine visit.Electronic medical records are the digital version of the paper charts that contain all of the patients’ medical history from one practice. They are the revolutionary tools used by most healthcare providers who have been impressed by what can be achieved through the records process. These electronic medical records facilitate their ability to provide a huge amount of diagnosis via the easy tract of data over time, the identification of the patients’ due date for preventive visits, and the monitoring of the most recent patients’ vaccinations and vital signs reading. Basically, they improve the quality of care with a lot of accuracy.

Long-Term Care

With an ever growing elderly demographic, we will study the benefits of applying electronic records to a long-term care facility. We can study how having instant access to a patient’s medical history, mental status, and possible future illnesses will help to provide the proper care needed for every individual in a long-term care facility. We will be able to understand how to adjust our services to cater to the needs of our patients.Some long-term care facilities employees like skilled nursing, independent and adult care assistants, and assisted living facilities care-takers would definitely benefit from having the electronic records because of itsfunctionality needs.We think that long-term care must be streamlined because the elderly patients should not have certain restrictions when it comes to their own personal health issues at thisstage in their life. Also there needs to be a certain type of coordinated system of information for each and every one who is trying to get long-term support.This presentationwill help bring to light the issues a nursing facility goes through. Team C knows that it is very important to avoid all of the inaccuracies and at the same time try and build a healthyrelationship with the patients.Based on everything the health care system allows the healthcare provider to do, we are sure that any facility will benefit from electronic medical records. The long-term facility for example will reduce the use of papers via the software and hardware. It will see improvements and facilitations on the process notes, care planning, physician orders, assessments and worksheets. Since a long-term care facility is a pretty busy place, the electronic medical records will actually make the communication of the patients’ medical history faster than ever for a quick response to emergencies.

New Hires

During our project we will target the facilities new hires. Explaining how and why we are implementing an electronic record system will be our objective. The better we are at training our new staff members the quicker we will be able to provide safer and more consistent services to our residents of the long-term care facility. We will do our best to set up meetings and training seminars that help train our new staff members as quickly as possible.Explaining why having and implementing an electronic record system will be the most important goal of Team C. Training all new hires will make it easier to find and retrieve patient’s health information. It will benefit the long-term facilities by increasing effectiveness and safety for all individuals in long-term care, new hires, and providers. New hires must be knowledgeable about the positive results obtained by the use of electronic medical records. Team C’s job will be to show the new hires step-by step the great benefits of electronic records compared to its paper counterpart. We will also make sure they retrieve and share the information in the safest possible way. This safety procedure means sharing information only with other qualified healthcare workers, which is a standard regulation according of HIPAA.

 

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Why are active on-duty firefighters likely to experience the adverse health effects Answer

Why are active on-duty firefighters likely to experience the adverse health effects from inhaling 300 ppm of carbon monoxide faster than nonactive off-duty firefighters who inhale the same concentration of the same substance? Explain your answer using the chemicals/process involved.

Answer: The active on-duty firefighters likely to experience the adverse health effects from inhaling 300 ppm of carbon monoxide faster than nonactive off-duty firefighters who inhale the same concentration of the same substance because
Breaths per minute and pulse on someone just finishing a work out are higher than someone with a low and stable system. So the ACTIVE guy will breathe in more, and deeper into the lungs, compared to someone that didn’t. Then the rate of carbon monoxide that enters into the bloodstream will be faster.
A smoke, from simple wood fires, is hazardous and lethal with concentrated inhalation. Smoke is a variable combination of compounds. The toxicity of smoke depends on the fuel, the heat of the fire and whether or how much oxygen is available for combustion. Fire-fighters on the scene of a fire are frequently exposed to carbon monoxide, hydrogen cyanide, nitrogen dioxide, sulphur dioxide, hydrogen chloride, aldehydes and organic compounds such as benzene. Different gas combinations present different degrees of hazard. Only carbon monoxide and hydrogen cyanide are commonly produced in lethal concentrations in building fires.

Carbon monoxide is the most common, characteristic and serious acute hazard of firefighting. Carboxyhaemoglobin accumulates rapidly in the blood with duration of exposure, as a result of the affinity of carbon monoxide for hemoglobin. High levels of carboxyhaemoglobin may result, particularly when heavy exertion increases minute ventilation and therefore delivery to the lung during unprotected firefighting. There is no apparent correlation between the intensity of smoke and the amount of carbon monoxide in the air. Fire-fighters should particularly avoid cigarette smoking during the clean-up phase, when burning material is smouldering and therefore burning incompletely, as this adds to the already elevated levels of carbon monoxide in the blood.

One of the major contributing factors to mortality and morbidity in fires is hypoxia because of oxygen depletion in the affected atmosphere, leading to loss of physical performance, confusion and inability to escape. The constituents of smoke, singly and in combination, are also toxic.

The various health risks that a fire fighter suffers are:

Health Risks

The health risk of firefighting includes trauma, thermal injury and smoke inhalation. The chronic health effects that follow recurrent exposure have not been so clear until recently. The occupational risks of fire-fighters have received a great deal of attention because of their known exposure to toxic agents. There are a number of unusual epidemiological characteristics that influence the interpretation of studies of fire-fighters and their occupational mortality and morbidity. Fire-fighters do not show a strong “healthy worker effect” in most studies.

 

Lung Cancer

Lung cancer has been the most difficult cancer site to evaluate in epidemiological studies of fire-fighters. A major issue is whether the large-scale introduction of synthetic polymers into building materials and furnishings after about 1950 increased the risk of cancer among fire-fighters because of exposure to the combustion products. Despite the obvious exposure to carcinogens inhaled in smoke, it has been difficult to document an excess in mortality from lung cancer big enough and consistent enough to be compatible with occupational exposure.

There is evidence that work as a fire-fighter contributes to risk of lung cancer. This is seen mostly among fire-fighters who had the highest exposure and who worked the longest time. The added risk may be superimposed on a greater risk from smoking.

Heart Disease

There is no evidence for an increased risk of death overall from heart disease. There is some evidence from clinical studies, to suggest a risk of sudden cardiac decompensation and risk of a heart attack with sudden maximal exertion and following exposure to carbon monoxide. This does not seem to translate into an excess risk of fatal heart attacks later in life, but if a fire-fighter did have a heart attack during or within a day after a fire it would be reasonable to call it work-related. Each case must therefore be interpreted with knowledge of individual characteristics, but the evidence does not suggest a generally elevated risk for all fire-fighters.

 

Cancer at Other Sites

Cancer at other sites has shown to be more consistently associated with firefighting than lung cancer.

The evidence is strong for genito-urinary cancers, including kidney, ureter and bladder. Except for bladder, these are rather uncommon cancers, and the risk among fire-fighters appears to be high. One might doubt (or rebut) the conclusion in an individual case would be heavy cigarette smoking, prior exposure to occupational carcinogens, schistosomiasis (a parasitic infection-this applies to bladder only), analgesic abuse, cancer chemotherapy and urologic conditions that result in stasis and prolonged residence time of urine in the urinary tract.

Cancer related to brain and central nervous system has shown highly variable findings in the extant literature, but this is not surprising since the numbers of cases in all reports are relatively small. The increased relative risks for lymphatic and hematopoietic cancers appear to be unusually high.

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ACC 290 Principles of Accounting Final Exam Answer

1.During the year, Sarah’s Pet Shop’s merchandise inventory decreased by $30,000. If the company’s cost of goods sold for the year was $450,000, purchases would have been

A.$480,000

B.$420,000

C.$390,000

Insufficient data to determine
2.At the beginning of the year, Wildcat Athletic had an inventory of $200,000. During the year, the company purchased goods costing $700,000. If Wildcat Athletic reported ending inventory of $300,000 and sales of $1,000,000, their cost of goods sold and gross profit rate would be
A.$400,000 and 60%

B.$600,000 and 40%

C.$400,000 and 40%

D.$600,000 and 60%
3.The accountant at Patton Company has determined that income before income taxes amounted to $11,000 using the FIFO costing assumption. If the income tax rate is 30% and the amount of income taxes paid would be $300 greater if the LIFO assumption were used, what would be the amount of income before taxes under the LIFO assumption

A.$11,300

B.$12,000

C.$10,000

D.$10,700
4.The accountant at Patton Company has determined that income before income taxes amounted to $11,000 using the FIFO costing assumption. If the income tax rate is 30% and the amount of income taxes paid would be $300 greater if the LIFO assumption were used, what would be the amount of income before taxes under the LIFO assumption

A.$11,300

B.$12,000

C.$10,000

D.$10,700
5.The accountant at Patton Company has determined that income before income taxes amounted to $11,000 using the FIFO costing assumption. If the income tax rate is 30% and the amount of income taxes paid would be $300 greater if the LIFO assumption were used, what would be the amount of income before taxes under the LIFO assumption?
A.$11,300

B.$12,000

C.$10,000

D.$10,700
6.At the beginning of the year, Uptown Athletic had an inventory of $400,000. During the year, the company purchased goods costing $1,500,000. If Uptown Athletic reported ending inventory of $600,000 and sales of $2,000,000, their cost of goods sold and gross profit rate would be

A.$900,000 and 65%

B.$900,000 and 35%

C.$1,300,000 and 35%

D.$1,300,000 and 65%

7.Greese Company purchased office supplies costing $4,000 and debited Office Supplies for the full amount. At the end of the accounting period, a physical count of office supplies revealed $1,100 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be

A.debit Office Supplies Expense, $1,100; credit Office Supplies, $1,100

B.debit Office Supplies, $2,900; credit Office Supplies Expense, $2,900

C.debit Office Supplies Expense, $2,900; credit Office Supplies, $2,900

D.debit Office Supplies, $1,100; credit Office Supplies Expense, $1,100

 

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MGMT 640 Financial Decision Making for Managers Final Exam Part 1 Answer

MGMT 640 Financial Decision Making for Managers Final Exam Part 1 Answer

MGMT 640 Financial Decision Making for Managers Final Exam Part 1 Answer

Quiz Submissions – Final Exam Part 1

Question 1
A typical use of managerial accounting is to:

help investors and creditors assess the financial position of the company.

help management get a clean audit report

help the marketing manager decide which product promotion to implement

help the SEC decide whether management is in compliance of its policies.
Question 2
Three costs incurred by Pitt Company are summarized below:
1,000 units 2,000 units
Cost A $10,000 $15,000
Cost B $21,000 $21,000
Cost C $16,000 $32,000
Which of these costs are variable?

A, B, and C

A and B

A only

C only

Question 3
Bubba’s Steakhouse has budgeted the following costs for a month in which 1,600 steak dinners will be produced and sold: Materials, $4,080; hourly labor (variable), $5,200; rent (fixed), $1,590; depreciation, $650; and other fixed costs, $400. Each steak dinner sells for $13.60 each. How much would Shula’s profit increase if 10 more dinners were sold?

Question 4
Bellfont Company produces door stoppers. August production costs are below:
Door Stoppers produced 77,000
Direct material (variable) $20,000
Direct labor (variable) 40,000
Supplies (variable) 20,000
Supervision (fixed) 29,200
Depreciation (fixed) 20,000
Other (fixed) 5,600
In September, Bellfont expects to produce 100,000 door stoppers. Assuming no structural changes, what is Bellfont’s production cost per door stopper for September?

Question 5
Aaron’s chairs is in the process of preparing a production cost budget for August. Actual costs in July for 120 chairs were:
Materials cost $4,820
Labor cost 2,630
Rent 1,500
Depreciation 2,500
Other fixed costs 3,200

Materials and labor are the only variable costs. If production and sales are budgeted to change to 110 chairs in August, how much is the expected total variable cost on the August budget?

Question 6
Carry-ALL plans to sell 1,300 carriers next year and has budgeted sales of $46,000 and profits of $22,000. Variable costs are projected to be $20 per unit. Michael Co. offers to pay $24,600 to buy 710 units from Carry-ALL. Total fixed costs are $7,000 per year. This offer does not affect Carry-ALL’s other planned operations. The incremental revenues for this situation are

Question 7
Stellar Company has the following sales, variable cost, and fixed cost. If sales increase by $10,000 then their profit increases/decreases by how much?

Sales $50,000
Variable Costs $7,200
Fixed Costs $30,000

Question 8
Susan is trying to decide whether or not to attend college during the next 12-week session. She has the following options:
1. Attend college full-time at a cost of $1,200.
2. Attend college part-time at a cost of $700 and work part-time earning $2,000.
3. Work full-time earning $4,800.
What is Susan’s incremental profit if she chooses option 3 over option 2?

Question 9
Total costs were $71,100 when 28,000 units were produced and $92,100 when 35,000 units were produced. Use the high-low method to find the estimated total costs for a production level of 32,000 units.

Question 10
Professional University teaches a large range of undergraduate courses. It is interested in determining the cost equation for the facilities cost as a function of student credit hours so that it an more accurately budget its facilities costs as enrollment grows. Information for the high and low cost semesters and volumes for last 5 years appears below
Semester Student Credit Hours Facilities Cost
Spring 2007 250,000 $500,000
Fall 2004 300,000 $530,000
Using the high low method, with student credit hours as the activity driver, what is the equation for facilities cost (FC) as a function of student credit hours?

FC = $350,000 + $0.60 / student credit hour

FC = -$585,100 + $1.67 / student credit hour

FC = $1.77 / student credit hour

FC = $2 / student credit hour

Question 11
Randy’s tireland makes a product that sells for $74 per unit and has $42 per unit in variable costs. Annual fixed costs are $24,000. If Rambles sells 10 units less than breakeven, how much loss would the company recognize on its income statement? (As the question asks “how much loss” you don’t have to put the negative sign. For example, suppose the loss is 100, then write the answer as 100 rather than -100.)

Question 12
Ritz Furniture has a contribution margin ratio of 0.16. If fixed costs are $173,400, how many dollars of revenue must the company generate in order to reach the break-even point?

Question 13
U.S. Telephone Cellular sells phones for $100. The unit variable cost per phone is $50 plus a selling commission of 10% (based on the unit sales price per phone). Fixed manufacturing costs total $1,190 per month, while fixed selling and administrative costs total $2,250. How many phones must be sold to achieve the breakeven point?

Question 14
Swimkids is a swimsuit manufacturer. They sell swim suits at a selling price is $30 per unit. Swimkids variable costs are $18 per unit. Fixed costs are $70,900. Swimkids expects sales of $281,900 next year. What is Swimkids’s margin of safety (in dollars)?

Question 15
Lambardi Company sells 3 types of bags. Bag A sells for $17 and has variable cost of $9.00 per unit. Bag B sells for $12 and has variable cost of $12.00 per unit. Bag C sells for $8 and has variable costs of $6.00 per unit. Lambardi sells in a mix of 2 units of A, 3 units of B and 5 units of C. What is the weighted average contribution margin per unit for Lambardi?

Question 16
Product A has a contribution margin per unit of $500 and required 2 hours of machine time. Product B has a contribution margin per unit of $1,000 and requires 5 hours of machine time. How much of each product should be produced given there are 100 hours of available machine time?

50 units of A and 25 units of B.

25 units of B.

50 units of A.

None of the above

Question 17 0 / 1 point
Delfi Company produces two models of seats, Toro and Prep. Information regarding these products for May follows:
Toro Prep
Number of units 3,000 7,000
Sales revenue $120,000 $140,000
Variable costs 60,000 42,000
Fixed costs 24,000 50,000
Net Income $36,000 $48,000
Pounds of plastic to produce one bucket 4.0 1.6
Contribution margin per unit $20 $14
Due to increased demand of plastic in the market, Delfi Company can obtain only 9,000 pounds of plastic per month. Delfi can sell as many seats as it can produce of either model. How many of each model should Delfi produce to maximize profit in May considering the constraint?

Question 18
Abagail Corp. uses activity-based costing system with three activity cost pools. The following information is provided:
Costs: Wages and salaries $ 213,000
Depreciation 118,000
Utilities 120,000
Total $440,000

Activity Cost Pools
Assembly Setting Up Other
Wages and salaries 0.52 30% 10%
Depreciation 0.40 45% 20%
Utilities 0.28 40% 30%

How much total cost would be allocated to the Assembly activity cost pool?

Question 19
Which of the following is not a goal of Managerial Accounting?

Provide information managers need for planning.

Provide information managers need for market wide interest rates.

Provide information managers need for control.

Provide information managers need for decision making.

Question 20
Which one of the following is least likely to be a fixed cost?

Rent for buildings

Rent for land

Cost of commodity inputs

Cost of property, plant and equipment