Question
a. The Housekeeping Department of Marshfield Clinic has direct costs of $1 million. The clinic's four patient service departments utilize the following amounts of space:
a. The Housekeeping Department of Marshfield Clinic has direct costs of $1 million. The clinic's four patient service departments utilize the following amounts of space: Department A = 5,000 square feet, Department B = 10,000 square feet, Department C = 15,000 square feet, and Department D = 20,000. Assuming that the cost driver for housekeeping costs is the amount of occupied space, what is the allocation of housekeeping costs to Department B?
b. Carlisle Clinic, a not-for-profit organization, began 2012 with an equity balance of $1 million. Assuming Carlisle Clinic reported net income of $200,000 for the year that ended on December 31, 2011, and had no other adjustments to equity during 2011, what was Carlisle Clinic's equity balance as of December 31, 2010?
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