7. A company that follows an accrual basis of accounting has utility expenses incurred but not yet paid. The amount would show up on the balance sheet as an accrued expense. (T/F)

8. Salaries payable was $1,000 on the balance sheet for 31 December 2012. Salaries payable was $1,500 on the balance sheet for 31 December 2013. The accountant made an error and forgot to take into consideration salaries payable when calculating the statement of cash flows. Before taking into consideration salaries payable, the net cash flow from operations was listed at $10,000 for the year ended 31 December 2013. After fixing the error, what should the correct net cash flow from operations be on the 31 December 2013 statement of cash flows? $________

9. You have only the information below. What amount should be listed in the cash account on the balance sheet dated 31 December 2013? $_________

Balance Sheet Dated 31 December 2012

Cash 50,000

Accounts Receivable 10,000

PP&E 15,000

Total Assets 75,000

Total Liabilities 25,000

Owners Equity 50,000

Cash Flow Statement for the Year Ended 31 December 2013

Net Cash From Operating Activities 60,000

Net Cash From Investing Activities 15,000

Net Cash From Financing Activities 5,000

10. Prepaid expenses belong on the balance sheet as an asset. (T/F)

11. The statement of cash flows utilizes data from both the balance sheet and income statement. (T/F)

12. For a hospital, evaluate each cost and identify whether it should be a variable cost or a fixed cost.
    1. Rent = ?
    2. MRI Machine = ?
    3. Latex gloves = ?

Possible choices: variable cost, fixed cost

13. Calculate total contribution margin in this problem. Note: I am looking for total contribution margin, not contribution margin per unit. You are given the following information:
    • Revenue is $20 per unit
    • Variable costs are $10 per unit
    • Fixed costs are $1,000
    • The company sold 100 units

Total Contribution Margin = _______?

14. Calculate the variable cost per unit given the following information for 2013:
    • Revenue was $1,000
    • Variable costs were $500
    • Fixed costs were $200
    • The company manufactured 100 units

Variable cost per unit = _______?

15. A business has a contribution margin per unit of $50, has fixed costs of $2,000, and wants to achieve a total profit of $1,000. How many units must the business sell to earn that total profit of $1,000.

Number of units = _______

16. In a capitation-based payment system, an increase in the number of patient visits will result in an increase in patient service revenue (T/F)

17. You are given the following information for a business in 2013:
    • Average (total) cost per visit was $50
    • Variable cost per visit was $40
    • Number of visits = 100

Total fixed costs (not per unit) = _______?

18. If a company wants to break even (i.e. have $0 profit) then total revenues must equal total costs? (T/F)

19. Facilities provides the most services to the other support departments, followed closely by human resources. The financial services department provides the least services to the other support departments. The allocation is in the following order: facilitieshuman resourcesfinancial services. The revenue-generating services are the routine and urgent care. Use the step down method to answer what is the total amount of indirect costs allocated to routine care in 2013?

$_______

Use the following information for activity in 2013:

Cost Drivers:
Financial Services	patient services revenue
Facilities	square feet
Human Resources	number of employees
Direct Costs of Support Departments:
Financial Services	4,000
Facilities	5,000
Human Resources	3,000
Direct Costs of Revenue-Producing Departments:
Routine Care	10,000
Urgent Care	8,000

	Patient	Space
	Services	(Square	Number of
Department	Revenue	Feet)	Employees
Support:
Financial Services		30	5
Facilities		40	10
Human Resources		50	15
Total		120	30
Patient Services:
Routine Care	30,000	100	20
Urgent Care	20,000	70	25
Grand Total	50,000	290	75