The Choices Below Depict Five Costs of Benton Corporation and a Possible

question 9

Multiple Choice

The choices below depict five costs of Benton Corporation and a possible driver for each cost. Which of these choices likely contains an inappropriate cost driver?

• A) Gasoline consumed; number of miles driven.
• B) Manufacturing overhead incurred in a heavily automated facility; direct labor hours.
• C) Sales commissions; gross sales revenue.
• D) Building maintenance cost; building square footage.
• E) Human resources department cost; number of employees.

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Definitions:

Bundled Payment

A payment model where a single lump sum is paid to cover all services related to a specific treatment or condition over a defined period.

Care Improvement

Efforts or initiatives undertaken to enhance the quality, efficiency, and effectiveness of healthcare services and patient care.

Predetermined Lump Sum

A fixed amount of money that is agreed upon in advance and paid all at once, often seen in financial agreements or settlements.

Hospital Readmissions Reduction Program

A Medicare program aimed at reducing unnecessary readmissions to hospitals by penalizing hospitals with higher than expected readmission rates for certain conditions.