Which of the Following Situations Is Most Likely to Create

question 36

Multiple Choice

Which of the following situations is most likely to create an incentive for doctors to provide unnecessary procedures?

• A)a fee-for-service health insurance policy
• B)free market health care
• C)a single-payer system
• D)a health maintenance organization

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Definitions:

Budget Variance

The variance between what was expected to be spent or earned, according to the budget, and the real amount that was spent or received.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead to individual products or job orders, based on a specific activity base, such as labor hours or machine hours.

Fixed Component

The portion of total costs that remains unchanged regardless of the level of production or business activity.

Variable Overhead Rate

The cost of indirect manufacturing expenses that fluctuate with production volume, calculated per unit of activity or base.