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Selected data for the three support and four patient services departments are shown below: Department Patient Services Revenue Space (Square Feet) Housekeeping Labor Hours Salary Dollars Support: 10,000 2,000 1,500,000 General Administration 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 Patient Services: 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 Assume that the hospital uses the direct method for cost allocation
Selected data for the three support and four patient services departments are
shown below:
Department Patient Services Revenue Space (Square Feet) Housekeeping Labor Hours Salary Dollars
Support: 10,000 2,000 1,500,000
General
Administration
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
Patient Services:
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
Assume that the hospital uses the direct method for cost allocation. Furthermore, the cost driver for general administration and financial services revenue, while the cost driver for facilities is space utilization.
What are the appropriate allocation rates for:
General Administration = $
Facilities = $
Financial Services = $
Expert Solution
The question is incomplete but I am providing calculation to computation of the question
Let us Suppose :
General Administration = 2000000 (not given )
Total =50000000 (given)
General administration costs = 2,000,000/50,000,000
= $0.0400
Facilities = 5000000 (not given)
Total = 600000 (given)
Facilities = 5,000,000/600,000
= $8.3333
Financial Service = 3000000 (not given)
Total = 50000000 (given)
Financial Service = 3,000,000/50,000,000
= $0.0600
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