PLEASE HELP! I NEED TO FIGURE THIS OUT BEFORE MIDNIGHT! I CAN PAY ADDITTIONAL DUE TO THE COMPLEXITY OF THE PROBLEMS! THANK YOU!
I am having difficulties with the following two part chapter review problem:
Use the following data to answer the question 6.3 (a&b):
St. Benedict's Hospital has three support departments and four patient services departments. The direct cost to each of the support departments is as follows:
General Administration $2,000,000
Financial Services $3,000,000
Selected data for the three support and four patient service departments are shown below:
Department Patient Services Revenue Square feet Housekeeping Labor Hours Salary dollars
General Admin 10,000 2,000 $1,5000,000
Facilities 20,000 5,000 3,000,000
Financial Services 15,000 3,000 2,000,000
Total 45,000 10,000 $ 6,500,000
Routine Care $30,000,000 400,000 150,000 $12,000,000
Intensive Care 4,000,000 40,000 30,000 5,000,000
Diagnostic Services 6,000,000 60,000 15,000 6,000,000
Other Services 10,000,000 100,000 25,000 7,000,000
Total $50,000,000 600,000 220,000 $30,000,000
GRAND TOTAL $50,000,000 645,000 230,000 $36,500,000
6.3 Assume that the hospital uses the direct method for cost allocation. Furthermore, the cost driver for general administration and financial services and patient services revenue, while the cost driver for facilities is space utilization.
a.) What are the appropriate allocation rates?
b.) Use the table below to allocate the hospitals overhead costs to the patient services departments. Fill in the chart below:
Support Department Allocation Rate Routine Care Intensive Care Diagnostic Services Total
General Admin _____________ ___________ _____________ __________________ _________
Facilities _____________ ___________ _____________ __________________ _________
Financial Services _____________ ___________ ____________ __________________ _________
Total Indirect Costs _____________ ___________ ____________ __________________ __________
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