Return to the direct method of cost allocation and use the same cost drivers as specified in
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Return to the direct method of cost allocation and use the same cost drivers as specified in Problem 6.4 for General Administration and Facilities. However, assume that $2,000,000 of Financial Services costs are related to billing and managerial reporting and $1,000,000 are related to payroll and personnel management activities.
a. Devise and implement a cost allocation scheme that recognizes that Financial Services has two widely different functions.
b. Is there any additional information that would be useful in completing Part a?
c. What are the costs and benefits to St. Benedict’s of creating two cost pools for Financial Services?
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Related Book For
Healthcare Finance An Introduction To Accounting And Financial Management
ISBN: 9781567932324
3rd Edition
Authors: Louis Gapenski PhD
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