Ch.6 Cost Allocation Examples_inclass_soln

Ch.6 Cost Allocation Examples_inclass_soln - COST...

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COST ALLOCATION DIRECT METHOD Using Allocation Rates per Unit Cost Pools Direct Costs Support Facilities Services 8,600,000 General Administration 5,250,000 Total 13,850,000 Allocation Bases Facilities Services General Admininstration (Square feet) (Revenue) Support Facilities Services General Administration Patient Services Routine Care 261,000 22,000,000 Critical Care 39,600 5,000,000 Total 300,600 27,000,000 Allocation Rates Facilities Services General Admininstration (Per square foot) (Per revenue $) Patient Services Routine Care 28.61 0.19 Critical Care 28.61 0.19 Direct Method Allocation Indirect Allocations Direct Costs Facilities Services General Admininstration Total Costs Support Facilities Services 8,600,000 (8,600,000) - General Administration 5,250,000 (5,250,000) - Patient Services Routine Care 8,300,000 7,467,066 4,277,778 20,044,844 Critical Care 3,300,000 1,132,934 972,222 5,405,156 Total 25,450,000 - - 25,450,000
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COST ALLOCATION DIRECT METHOD Using Allocation Percentages Cost Pools Direct Costs Support Facilities Services 8,600,000 General Administration 5,250,000 Total 13,850,000 Allocation Bases Facilities Services General Admininstration (Square feet) (Revenue) Support Facilities Services
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