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Unformatted text preview: invoices/bills generated, and the cost driver for administration is revenue. Using the step-down method, allocate all support department costs to the patient service departments. Exam question where or not cost drivers are good Totals: IM = $698,763.03 (full costs bc they include everything) Ped = $901,277.05 $1,600,040.08 (total costs after allocation) $1,600,000 (total original direct costs from above) Setp-down diff from direct method: allocating costs to support depts BEFORE you get the costs down to the service depts HK costs go through 2 other support depts before they get to patient services depts Exam question: Why do we do cost allocation? Mechanics of how step-down / cost allocation works. ....
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- Spring '10