Under the DRG System, Assume a Conversion Rate of $525

question 5

Multiple Choice

Under the DRG system, assume a conversion rate of $525 per unit and a relative weight of 2.65, then a hospital would receive how much for a patient with this diagnosis?

• A) $198.11
• B) $1391.25
• C) $2782.50
• D) $525.00

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Definitions:

Cost of Goods

The total cost of manufacturing or acquiring a product or service that is sold to customers.

Machine-Hour

A measure of production or operation time where costs are allocated based on the number of hours a machine is operated.

Predetermined Overhead Rate

A rate calculated before the accounting period begins, used to allocate manufacturing overhead to individual jobs.

Machine-Hours

A unit of measurement for production capacity, indicating the total number of hours that machinery is operational during a given period.