A healthcare facility has three departments: Surgery, Pediatrics, and Radiology. The facility incurred $500,000 in overhead costs. The following data is available:

• Surgery: 5,000 surgeries performed
• Pediatrics: 10,000 patient visits
• Radiology: 15,000 scans conducted
• Allocation bases:
  • Surgery: Number of surgeries
  • Pediatrics: Number of patient visits
  • Radiology: Number of scans

1. Calculate the overhead allocation rate for each department. b. Allocate the overhead costs to each department. c. Discuss the fairness and effectiveness of using this allocation method.