Deck 8: Financial Data

Question 1

Which of the following line items would NOT be included in an operational budget?

A) Payroll
B) Equipment leases
C) Office supplies
D) Software

Answer 1

Software

Question 2

How much would it cost annually to rent a new scanner if the rental cost (plus maintenance) is $450 per month?

A) $5,400
B) $5,800
C) $6,200
D) $6,400

Answer 2

$5,400

Question 3

Which type of expenditures are for large, oftentimes equipment, purchases?

A) Expense reimbursements
B) Interest on debt
C) Payroll
D) Capital budget

Answer 3

Capital budget

Question 4

Often projections for capital purchases are required how many years prior to the purchase?

A) 1-2 years
B) 3-5 years
C) 6-10 years
D) 10-15 years

Question 5

How much of the cost is recovered per year if the purchase price of a new warehouse is $150,000 and the average annual savings are expected to be $12,500?

A) 8.25%
B) 8.33%
C) 8.5%
D) 8.75%

Question 6

Calculate the payback period if a new delivery truck is purchased at a cost of $50,000, with monthly savings of $1,041.67.

A) 2.5 years
B) 3 years
C) 3.5 years
D) 4 years

Question 7

How much of the cost is recovered per year if the purchase price of a new delivery truck is $50,000 and the average annual savings are expected to be $12,000?

A) 24.00%
B) 25.50%
C) 26.25%
D) 27.75%

Question 8

How much would it cost to lease a new forklift for 4 years if the lease cost (plus maintenance) is $650 per month?

A) $31,000
B) $31,100
C) $31,200
D) $31,300

Question 9

Which type of capital equipment purchase represents how much of the equipment cost is recovered per year?

A) Payback period
B) Return on investment
C) Variance
D) Accrued interest

Question 10

Which of the following is an example of a fixed cost on an operational budget?

A) Price of printer equipment lease
B) Utilities
C) Cost of printer paper
D) Packaging costs

Question 11

Budgets are based on:

A) calendar years.
B) fiscal years.
C) calendar months.
D) fiscal months.

Question 12

Fixed costs are based on:

A) forecasted salaries for the upcoming year.
B) forecasted profits for the upcoming year.
C) contracted amounts between a company and its vendors.
D) costs from previous years.

Question 13

How much of the equipment cost is recovered per year if the purchase price of a new printer is $12,000 and the average annual savings are expected to be $4,000?

A) 29.75%
B) 31.00%
C) 32.50%
D) 33.33%

Question 14

What type of accounting method is utilized by HIM directors (in terms of expenses)?

A) Cash method
B) Tax liability method
C) Accrual method
D) Profit method

Question 15

Calculate the payback period if a new forklift is purchased at a cost of $78,000, with monthly savings of $1,000 due to quicker retrievals and turnaround time for record requests from storage.

A) 4.5 years
B) 6.5 years
C) 8.5 years
D) 10.5 years

Question 16

Calculate the payback period if a new warehouse is purchased at a cost of $150,000, with monthly savings of $1,000.

A) 8.5 years
B) 10 years
C) 12.5 years
D) 14 years

Question 17

Calculate the payback period if a new printer is purchased at a cost of $12,000, with monthly savings of $333.33 due to higher quality print and fewer reprints, etc. The annual savings are estimated at $4,000.

A) 2 years
B) 2.5 years
C) 3 years
D) 3.5 years

Question 18

How much of the equipment cost is recovered per year if the purchase price of a new forklift is $78,000 and the average annual savings are expected to be $12,000?

A) 13.278%
B) 14.745%
C) 15.385%
D) 16.254%

Question 19

A case mix represents:

A) an average of the type of patients a facility treats.
B) a range of the type of patients a facility treats.
C) an average of the type of procedures a facility performs.
D) an average of provider productivity at a facility.

Question 20

What does the payback period determine?

A) How long it will take to pay off debts
B) How long it will take break even on fixed and variable costs
C) How long it will take to recover the expense of the equipment
D) How long it will take to start generating a profit

Question 21

Calculate the variance for the below chart:

A) $4,445
B) $5,850
C) ($5,850)
D) ($4,445)

Question 22

Calculate the variance for the below chart:

A) $450
B) $500
C) ($450)
D) ($500)

Question 23

An employee earns $42,000. The annualized amount prior to a raise in pay is $3,500 per month. If the employee gets a 5% raise, then what would the new monthly payment be for that employee beginning with the October 1st payroll?

A) $3,675
B) $3,850
C) $4,020
D) $4,845

Question 24

Calculate the variance for the below chart:

A) $185
B) $170
C) ($170)
D) ($185)

Question 25

Calculate the variance for the below chart:

A) $800
B) $1,200
C) ($1,200)
D) ($800)

Question 26

How can monthly expenditures to date be annualized?

A) By adding up the preceding months and multiplying the total expenditures for each category by the total months to date
B) By adding up the preceding months and multiplying the total expenditures for each category by the total years to date
C) By adding up the preceding months and dividing the total expenditures for each category by the total years to date
D) By adding up the preceding months and dividing the total expenditures for each category by the total months to date

Question 27

An employee earns $76,000. The annualized amount prior to a raise in pay is $6,333 per month. If the employee gets an 8% raise, then what would the new monthly payment be for that employee beginning with the October 1st payroll?

A) $3,675
B) $4,850
C) $5,020
D) $6,840

Question 28

If a company spent more than predicted or spent an amount larger than was budgeted, then it incurred a(an):

A) positive variance.
B) negative variance.
C) equal variance.
D) fixed variance.

Question 29

Which of the following is an example of a variable cost on an operational budget?

A) Rent
B) Labor
C) Property insurance
D) Capital equipment

Question 30

An employee earns $82,000. The annualized amount prior to a raise in pay is $6,833 per month. If the employee gets a 12% raise, then what would the new monthly payment be for that employee beginning with the October 1st payroll?

A) $7,653
B) $8,850
C) $8,920
D) $9,840

Question 31

If a company spent less than predicted or spent an amount smaller than was budgeted, then it incurred a(an):

A) positive variance.
B) negative variance.
C) equal variance.
D) fixed variance.

Question 32

Calculate the variance for the below chart:

A) $5,450
B) ($5,450)
C) ($5,750)
D) $5,750

Question 33

Calculate the variance for the below chart:

A) ($800)
B) ($700)
C) $700
D) $300

Question 34

What is a deviation from the original prediction of what would be spent and when?

A) Fixed cost
B) Anticipated revenue
C) Variance
D) Payback Period

Question 35

An employee earns $24,000. The annualized amount prior to a raise in pay is $2,000 per month. If the employee gets a 3% raise, then what would the new monthly payment be for that employee beginning with the October 1st payroll?

A) $1,050
B) $2,060
C) $3,020
D) $4,010

Question 36

Calculate the variance for the below chart:

A) ($85)
B) ($10)
C) $0
D) $85

Question 37

Calculate the percentage of variance for the below chart:

A) (-62.5%)
B) (-58.50%)
C) 58.50%
D) 62.50%

Question 38

Variable costs are estimated based on:

A) capital equipment costs for the upcoming year.
B) forecasted profits for the upcoming year.
C) contracted amounts between a company and its vendors.
D) the prior year activity levels with any expected changes for the coming year.

Question 39

Which type of (total) variance does the following chart display?

A) Positive variance
B) Equal variance
C) Negative variance
D) Fixed variance

Question 40

What portion of an operating budget is usually the highest percentage of the costs?

A) Payroll
B) Insurance
C) Interest expenses
D) Capital expenditures

Question 41

Last year, a practice's returned claims were 8% of total submissions (600,000 claims). How many claims were returned last year?

A) 26,000 claims
B) 48,000 claims
C) 64,000 claims
D) 84,000 claims

Question 42

Calculate the percentage of variance for the below chart:

A) 21.84%
B) 26.42%
C) 31.84%
D) 38.63%

Question 43

The EHR salesman has stated that the new system will improve completeness of submitted claims, thereby reducing the returned claims by 80%. If the salesman is correct, you can potentially decrease your staff who follow up on these claims by 1.5 FTE, which is an annual savings of about $39,000. In reality, this may be a low estimate of annual savings because of improved efficiency and better turnaround of claims processing. The cost of the EHR under consideration for the group practice will be $106,000. What is the return on investment?

A) 35.6%
B) 36.8%
C) 37.4%
D) 38.0%

Question 44

The EHR salesman has stated that the new system will improve completeness of submitted claims, thereby reducing the returned claims by 88%. If the salesman is correct, you can potentially decrease your staff who follow up on these claims by 1.5 FTE, which is an annual savings of about $44,000. In reality, this may be a low estimate of annual savings because of improved efficiency and better turnaround of claims processing. The cost of the EHR under consideration for the group practice will be $114,000. What is the return on investment?

A) 35.6%
B) 36.8%
C) 37.4%
D) 38.6%

Question 45

How is CMI useful in planning for a new budget year?

A) Anticipated expenses can be estimated.
B) Anticipated revenue can be estimated.
C) Anticipated equipment purchases can be projected.
D) Anticipated salary expense can be estimated.

Question 46

If annual savings are about $44,000 and the cost of the EHR under consideration for the group practice will be $114,000. What is the payback period?

A) 0.7 years
B) 1.9 years
C) 2.6 years
D) 3.1 years

Question 47

Calculate the percentage of variance for the below chart:

A) 7.75%
B) 8.0%
C) 9.50%
D) 10.0%

Question 48

Last year, a practice's returned claims were 5% of total submissions (400,000 claims). The accuracy standards require 97.0% accuracy and you hope to see this standard applied enterprise wide for all coding. What does this standard allow for returned claims?

A) 3.0% error rate
B) 3.5% error rate
C) 4.0% error rate
D) 4.5% error rate

Question 49

If fringe benefits are estimated at 30% of base salary and Jane has an annual salary of $24,000, what is the monthly salary plus fringe benefit amount that would be included in the operational budget for Jane?

A) $2,000
B) $2,600
C) $7,200
D) $600

Question 50

Last year, a practice's returned claims were 8% of total submissions (600,000 claims). The accuracy standards require 94.0% accuracy and you hope to see this standard applied enterprise wide for all coding. What does this standard allow for returned claims?

A) 5.0% error rate
B) 5.5% error rate
C) 6.0% error rate
D) 6.5% error rate

Question 51

Last year, a practice's returned claims were 5% of total submissions (400,000 claims). How many claims were returned last year?

A) 20,000 claims
B) 40,000 claims
C) 60,000 claims
D) 80,000 claims

Question 52

Last year, a practice's returned claims were 5% of total submissions (400,000 claims). The accuracy standards require 97.0% accuracy and you hope to see this standard applied enterprise wide for all coding. How many returned claims will be allowed?

A) 388,000 claims
B) 12,000 claims
C) 20,000 claims
D) 320,000 claims

Question 53

If annual savings are about $39,000, and the cost of the EHR under consideration for the group practice is $106,000. What is the payback period?

A) 2.7 years
B) 3.9 years
C) 4.2 years
D) 5.1 years

Question 54

Which of the following would require a capital budget justification?

A) Annual salaries
B) Annual employee raises
C) A new heavy duty scanner
D) Your annual printer lease

Question 55

Last year, a practice's returned claims were 8% of total submissions (600,000 claims). The accuracy standards require 94.0% accuracy and you hope to see this standard applied enterprise wide for all coding. How many returned claims are allowed with this standard?

A) 564,000 claims
B) 520,000 claims
C) 36,000 claims
D) 80,000 claims