The Difference Between an Individual Practice Association Plan (IPA)and a Group

question 74

Multiple Choice

The difference between an individual practice association plan (IPA) and a group practice plan is that

• A)an IPA is made up of a group of independent doctors who work out of their own offices;while a group practice plan confines doctors to the same central,shared facility.
• B)a group practice plan is made up of a group of independent doctors who work out of their own offices;while an IPA confines doctors to the same central,shared facility.

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Definitions:

Period Cost

Expenses that are not directly tied to production activities and are expensed in the period in which they occur.

Contribution Margin

The difference between the sales revenue of a product and its variable costs, used to cover fixed costs and contribute to profit.

Variable Costing

An accounting method that only assigns variable costs to inventory, treating fixed costs as expenses in the period they are incurred.

Variable Costing

An accounting practice that only factors in variable production expenses (like direct materials, direct labor, and variable manufacturing overhead) into the cost of goods.