I am having difficulties with the following two part chapter review problem: Use the following data to answer the question 6.3 (a&b):

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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 $2,000,000Facilities $5,000,000Financial Services $3,000,000Selected data for the three support and four patient service departments are shown below:Department         Patient Services Revenue       Square feet    Housekeeping Labor Hours   Salary dollarsSupport:General Admin       10,000          2,000   $1,5000,000Facilities                                               20,000 5,000     3,000,000Financial Services 15,000 3,000                2,000,000 Total              45,000 10,000     6,500,000Patient Services:Routine Care $30,000,000 400,000 150,000 $12,000,000Intensive Care                  4,000,000                 40,000   30,000               5,000,000Diagnostic Services             6,000,000 60,000   15,000                6,000,000Other Services   10,000,000 100,000     25,000     7,000,000 Total $50,000,000 600,000 220,000     $30,000,000GRAND TOTAL $50,000,000 645,000 230,000 $36,500,0006.3 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 TotalGeneral Admin _____________ ___________     _____________   __________________ _________Facilities _____________ ___________     _____________   __________________ _________Financial Services _____________ ___________      ____________   __________________ _________Total Indirect Costs _____________ ___________      ____________   __________________ __________

Question

I am having difficulties with the following two part chapter review problem: Use the following data to answer the question 6.3 (a&b):

  • Written in: 17-Oct-2019
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Oct 17, 2019

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