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6.1 the housekeeping services department of ruger clinic a multispecialty practice in Toledo, Ohio had $100,000 in direct costs during 2015. These costs must be

6.1 the housekeeping services department of ruger clinic a multispecialty practice in Toledo, Ohio had $100,000 in direct costs during 2015. These costs must be allocated to Ruger's three revenue producing patient services dpartments using the direct method. Two cost drivers are under consideration: patient services revenue and hours of housekeeping services used. the patient pervices departments generated $5 million in total revenues during 2015, and to support these clinical activities, they used 5,000 hours of housekeeping services. 6.2 refer to problem 6.1 assume that the three patient services departments are adult services, pediatric services and other services. the patient services revenue and hours of housekeeping services for each department are as follows: Department Revenue Housekeeping Hours Adult services $3,000,000 1,500 Pediatric services $1,500,000 3,000 Other services $500,000 500 total $5,000,000 5,000 a. what is the dollar allocation to each patient services department if patient services revenue is used as the cost driver? b. what is the dollar allocation to each patient services department if hours of housekeeping support is used as the cost driver? c. what is the difference in the allocation to each department between the two drivers? d. which of the two drivers is better? why?

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