#1). Use the information for St. Benedicts.Use the direct method of cost allocation. Assume that $2,000,000 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 $2,000,000 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. Benedicts. Use the direct method of cost allocation.

Assume that $2,000,000 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.

Use the following information for problems #1-6 St. Benedict's Hospital has three support departments and four patient services departments. The direct costs to each of the support departments are as follows General Administration Facilities Financial Services S2,000,000 S5,000,000 S3,000,000 Selected data for the three support and four patient services departments are shown below: Patient Services Space Housekeeping Salary Department Revenues (square feet) Labor HoursDollars Support General Administration Facilities Financial Services 10,000 20,000 15,000 45,000 2,000 $ 1,500,000 5,000$ 3,000,000 3,000 $ 2,000,000 6,500,000 Total 10,000 Patient Services Routine Care Intensive Care Diagnostic Services Other Services $ 30,000,000 S4,000,000 S $ 10,000,000 $50,000,000 S 50,000,000 400,000 40,000 60,000 100,000 600,000 645,000 150,000$ 12,000,000 30,000 $ 5,000,000 15,000$ 6,000,000 25,000$ 7,000,000 220,000 $ 30,000,000 230,000 $ 36,500,000 6,000,000 Total Grand Total Use the following information for problems #1-6 St. Benedict's Hospital has three support departments and four patient services departments. The direct costs to each of the support departments are as follows General Administration Facilities Financial Services S2,000,000 S5,000,000 S3,000,000 Selected data for the three support and four patient services departments are shown below: Patient Services Space Housekeeping Salary Department Revenues (square feet) Labor HoursDollars Support General Administration Facilities Financial Services 10,000 20,000 15,000 45,000 2,000 $ 1,500,000 5,000$ 3,000,000 3,000 $ 2,000,000 6,500,000 Total 10,000 Patient Services Routine Care Intensive Care Diagnostic Services Other Services $ 30,000,000 S4,000,000 S $ 10,000,000 $50,000,000 S 50,000,000 400,000 40,000 60,000 100,000 600,000 645,000 150,000$ 12,000,000 30,000 $ 5,000,000 15,000$ 6,000,000 25,000$ 7,000,000 220,000 $ 30,000,000 230,000 $ 36,500,000 6,000,000 Total Grand Total