Central Medical Clinic (CMC) has two service departments - Energy and Building Services. CMC also has three operating departments -Pediatrics, Geriatrics and Surgery. CMC allocates the Energy department costs on the basis of kilowatt hours and the Building Services department costs on the basis of square metres. Pediatrics applies overhead based on the number of children seen. Geriatrics applies overhead based on the number of seniors seen. Surgery applies overhead based on the number of operations performed. 1 2 The following table contains budgeted operating data for the upcoming year: 3 4 Service Departments Operating Departments 5 5 Building Enersy Services Pediatries Geriatrics Surgery 6 Overhead before allocation $300.000 $150,000 $1,200,000 $800,000 $1,600,000 7 kilowatt hours 2,500 11,000 16,500 55,000 27,500 8 Square metres 9,000 20,000 10,000 12,000 18,000 9 children 5,000 10 Seniors 3,200 11 Operations 2,500 12 13 1. Allocate service department costs to the operating departments using the step method. Allocate the energy department costs first. 14 Calculate the predetermined overhead rate for each operating department. (8 marks) You may not need to use all the highlighted cells. 15 Use this table to calculate the allocation percentages 16 Service Departments Operating Departments 17 Building Energy Services Pediatrics Geriatrics Surgery Total 18 19 20 21 22 22 23 Use this table to allocate the costs and calculate the predetermined overhead rates 24 Service Departments Operating Departments Bullding 25 Energy Services Pediatrics Geriatrics Surgery Total $300,000 26 Budgeted overhead before allocation $150,000 $1,200,000 $800,000 $1,600,000 $4,050,000 27 28 29 Budgeted overhead after allocation ao 31 32 33 Predetermined overhead rates 34 2. During the last month, the departments at CMC saw 200 children, 150 seniors and performed 300 operations. How much overhead would 35 have been applied during the last month if the step method had been used? (3 marks) 36 37 Pediatrics Geriatrics Surgery 38 39 40 42