A Contract with Which of the Following Payment Terms Can

question 54

Multiple Choice

A contract with which of the following payment terms can result in an increased financial risk to the provider?

• A) capitation
• B) percentage of premiums
• C) fee-for-service
• D) discounted fee-for-service

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Definitions:

Activity Variance

The difference between budgeted and actual activity levels, often analyzed in cost accounting and performance management.

Cleaning Equipment

Assets such as vacuums, mops, and detergents used in maintaining tidiness and hygiene standards at a workplace or production facility.

Cost Formula

An equation or calculation that determines the total cost of producing goods or services, often including factors like labor, materials, and overhead.

Flexible Budget

A financial plan that changes in accordance with alterations in activity volume or intensity.