The Merger of Two Community Hospitals Located in the Same

question 6

Multiple Choice

The merger of two community hospitals located in the same geographic market is called

• A) vertical integration.
• B) horizontal integration.
• C) a leveraged buyout.
• D) a conglomerate merger.
• E) a real shame since one of the hospitals will likely close.

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Definitions:

Absorption Costing

An accounting method that includes all manufacturing costs, both direct and indirect, in the cost of a product.

Markup

The amount added to the cost of merchandise to arrive at the selling price, usually expressed as a percentage of the cost.

Selling Price

The amount of money a buyer pays to acquire a product or service from a seller.

Absorption Costing

An accounting method that includes all production costs (direct materials, direct labor, and both variable and fixed overhead) in the cost of a product.