A Hospital Adds a New Addition and Needs to Acquire

question 92

Multiple Choice

A hospital adds a new addition and needs to acquire some new equipment for the addition.The cost driver for the equipment is patient-days per month.The new addition increases the patient-days per month outside the relevant range.What type of equipment costs will change as a result of the addition?

• A) discretionary fixed costs
• B) discretionary variable costs
• C) committed fixed costs
• D) committed variable costs

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Definitions:

Double-Entry Bookkeeping System

An accounting method that records every financial transaction in at least two accounts, ensuring that the accounting equation (assets = liabilities + owner's equity) remains balanced.

Single-Entry System

An accounting method where each transaction is recorded only once, either as an income or an expense, not used in double-entry bookkeeping.

Accounting Documents

Records that encapsulate financial transactions and positions relevant to a business or individual.

Invoices

Documents issued by a seller to a buyer, detailing products or services provided, prices, terms of sale, and payment instructions.