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a. What are the proper allocation rates? b. Use an allocation table similar to exhibit 6.7 to allocate the hospitals overhead cost prior to the

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a. What are the proper allocation rates? b. Use an allocation table similar to exhibit 6.7 to allocate the hospitals overhead cost prior to the patient services departments \begin{tabular}{|c|c|c|} \hline \multicolumn{2}{|l|}{ Projected Revenues by Patient Services Department } & EXHIBIT6.3Kensington \\ \hline Routine Care & $16,000,000 & Hospital: 2016 \\ \hline Laboratory & 5,000,000 & Revenue and \\ \hline Radiology & 6,000,000 & Cost Projectio \\ \hline Total revenues & $27,000,000 & \\ \hline \multicolumn{3}{|l|}{ Projected Costs for All Departments } \\ \hline \multicolumn{3}{|l|}{ Patient Services Departments (Direct Costs): } \\ \hline Routine Care & $5.500,000 & \\ \hline Laboratory & 3,300,000 & \\ \hline Radiology & 2,800,000 & \\ \hline Total costs & $11,600,000 & \\ \hline \multicolumn{3}{|l|}{ Support Services Departments (Overhead Costs): } \\ \hline Financial Services & $1,500,000 & \\ \hline Facilities & 3,800,000 & \\ \hline Housekeeping & 1,600,000 & \\ \hline General Administration & 4,400,000 & \\ \hline Human Resources & 2,550,000 & \\ \hline Total overhead costs & $13,850,000 & \\ \hline Total costs of both patient and support services & $25,450,000 & \\ \hline Projected profit & $1,550,000 & \\ \hline \end{tabular} EXHIBIT 6.7 Kensington Hospital: Final Allocations

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