Chapter 4 problems 41 underlying cost structure 500000

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Unformatted text preview: only include fixed costs. 4.5 The goal of cost allocation is to properly manage the sharing of indirect costs in order to maximize equitable cost sharing practices. It is also important for allocating overhead costs to the most appropriate entity or department. Chapter 4 problems 4.1 Underlying Cost Structure: 500,000 + (25 x volume) Expected total costs: 687,500 Total cost at 5,000 procedures: 625,000 Total cost at 10,000 procedures: 750,000 Average cost at: 5,000 procedures: 125 7,500: 91.6 10,000: 75 4.2 A. 257,500 + (5x + 1y) B. 317,500: expected total costs C: 257,000 + 6(7,500) = 302,000 / 257,500 + 6(12,500) = 332,000 D: Average Total Cost at 7,500 procedures: 4...
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This document was uploaded on 02/24/2014 for the course HCM 4550 at University of Minnesota Duluth.

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