Cost Allocation in Healthcare at Bayer

Requirements:

1. Allocate overhead costs to different departments (e.g., R&D, Production, Sales) at Bayer using an appropriate cost allocation method.

Department	Direct Costs ($)	Overhead Costs ($)
R&D	12,000,000	4,800,000
Production	18,000,000	7,200,000
Sales	8,000,000	3,200,000

2. Calculate the total cost for each department.
3. Evaluate the impact of overhead cost allocation on department budgets.
4. Recommend strategies to optimize cost allocation and improve financial performance.