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4 2. The Housekeeping Service Department of Orlando Radiology Clinic had 560,000 in direct costs during the year. These costs must be allocated to

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4 2. The Housekeeping Service Department of Orlando Radiology Clinic had 560,000 in direct costs during the year. These costs must be allocated to the clinic's tree revenue-producing departments: Adult Radiology Services, Pediatric Radiology Services, and Other Radiology Services using the direct method. The radiology services revenue and hours of housekeeping services for each department are as follows: Department Adult Radiology Services Pediatric Radiology Services Other Radiology Services Total Revenues $1,200,000 600,000 200,000 $2,000,000 Housekeeping Hours 300 600 200 1,100 a. What is the dollar allocation to each radiology services department if patient services revenue is used as the cost driver to allocate housekeeping costs to revenue-producing departments? Hint: complete the following table: Department Revenues Allocation Rate. Allocation Adult Radiology Services Pediatric Radiology Services $1,200,000 600,000 Other Radiology Services Total 200,000 $2,000,000 $ b. What is the dollar allocation to each radiology services department if hours of housekeeping support are used as the cost driver? Hint: complete the following table: Department Adult Radiology Services Pediatric Radiology Services Other Radiology Services Total Hours Allocation Rate Allocation 300 600 200 1,100. Which of the two drivers is better? Please explain.

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