Refer to Problem 4.4. Assume that the three patient services departments are Adult Services, Pediatric Services, and Other Services. The patient services revenue and hours of housekeeping services for each department are as follows:

a.What is the dollar allocation to each patient services department if patient services revenue is used as the cost driver?

b. What is the dollar allocation to each patient services department if hours of housekeeping support are used as the cost driver?
c.What is the difference in the allocation to each department between the two drivers?
d.Which of the two drivers is better?Why?
The following data pertain to Problems 4.6 through 4.8:

St. Benedict’s Hospital has three support departments and four patient services departments.

The direct costs to each of the support departments are:

Selected data for the three support and four patient services departments are as follows:

Transcribed Image Text:

Department Adult Services Pediatric Services Other Services Total Revenue Housekeeping Hours $3,000,000 1,500 1,500,000 3,000 500,000 $5,000,000 500 5,000