10. (3 points) Hospital Corp has 2 service departments and 2 operating departments. The Service Departments are Administration and Cafeteria. The Operating departments are Emergency Room and Standard Care. Administration costs are allocated based on labor hours. The Cafeteria is based on number of employees. Hospital Corp uses the step-down method to allocate service department costs, where administration is allocated first and followed by the cafeteria. Using the table below, what is the total amount of Cafeteria costs allocated to the operating departments (rounded to the nearest 100 dollars) See excel file for additional support Department Costs before allocation Allocation Information Labor Hours Number of Employees Total cost after allocation a. $150,000 b. $177,800 c. $208,100 d. $180,300 e. $400,000 Service Departments Administration Cafeteria $ 250,000.00 $ 150,000.00 10,000 25 (250,000) 8,000 15 Operating Departments Emergency Room Standard Care $ 2,400,000.00 $1,800,000.00 r 30,000 + 28,000 75 T 60 8000 / 66 K = 12 % 12% 150K Total $4,600,000.00 76,000-10000 = 66k 135

10. ( 3 points) Hospital Corp has 2 service departments and 2 operating departments. The Service Departments are Administration and Cafeteria. The Operating departments are Emergency Room and Standard Care. Administration costs are allocated based on labor hours. The Cafeteria is based on number of employees. Hospital Corp uses the step-down method to allocate service department costs, where administration is allocated first and followed by the cafeteria. Using the table below, what is the total amount of Cafeteria costs allocated to the operating departments (rounded to the nearest 100 dollars) See excel file for additional support a. $150,000 b. $177,800 8000/66k=12% c. $208,100 12%. KOK d. $180,300 e. $400,000