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#1). Use the information for St. Anthony's. Use the direct method of cost allocation. Assume that $5,000,000 of financial services costs is related to billing
#1). Use the information for St. Anthony's. Use the direct method of cost allocation. Assume that $5,000,000 of financial services costs is related to billing and managerial reporting and $1,000,000 is related to payroll and personnel management activities. What is the allocation rate for the Financial Services cost pool allocated based on patient services revenues? Hint: Find the most appropriate cost driver. The $5,000,000 of the Financial Services cost is related to 'Billing and Managerial Reporting. ' The cost driver will be Total Patient Services Revenue. #2). Use the information for St. Anthony's. Use the direct method of cost allocation. Assume that $5,000,000 of financial services costs is related to billing and managerial reporting and $1,000,000 is related to payroll and personnel management activities. What is the allocation rate for the Financial Services cost pool allocated based on salary dollars? Hint: Find the most appropriate cost driver. The 'Payroll and Personnel Management Activities' cost of $1,000,000 is directly related to salary dollars. This means the cost driver should be the total salary dollars for providing patient care. #3). Use the information for St. Anthony's. Use the direct method of cost allocation. Assume that $5,000,000 of financial services costs is related to billing and managerial reporting and $1,000,000 is related to payroll and personnel management activities. How much of the $5,000,000 financial services cost pool is allocated to Intensive Care? Hint: Use the cost driver you calculated for 'Financial Services- Billing and Managerial Reporting' (problem #1) and then multiple that by the Patient Service Revenue for Intensive Care. Create a table it will help
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