Assume that the hospital uses the direct method for cost allocation. Furthermore, the cost for general administration and financial services is patient services revenue, while the cost driver is space utilization.

A. What are the appropriate allocations rates? B. Use an an allocation table similar to the one above to allocate the hospitals overhead costs to patient services departments.

Kensington Hospital: Final Allocations Total indirect costs =$8,644,050+$2,271,694+$2,928,546=$13,844, Total costs =$14,144,050+$5,571,694+$5,728,546=$25,444,290