In General, Prospective Payment Systems Establish Reimbursement for

question 65

Multiple Choice

In general, prospective payment systems establish reimbursement for

• A)resources already used
• B)services already provided
• C)bundled services
• D)costs incurred in the delivery of services

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Definitions:

FIFO Method

A cost flow assumption for inventory valuation where the first items acquired (First In) are the first sold or used (First Out), affecting the cost of goods sold and inventory on financial statements.

Process Costing

A costing method used in manufacturing where costs are assigned to products based on the processes or stages they go through.

Equivalent Units

A technique used in process costing that converts partially completed goods into a number of fully completed units.

Conversion Costs

The sum of direct labor and manufacturing overhead costs, representing the expenses incurred to convert raw materials into finished products.