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could you please explain how ro get these questions St. Benedict's Hospital has three support departments and four patient services departments. The direct costs to
could you please explain how ro get these questions
St. Benedict's Hospital has three support departments and four patient services departments. The direct costs to each of the support departments are as follows:
6.6 Return to the direct method of cost allocation and use the same cost drivers as specified in Problem 6.4 for the general administration and facilities departments. However, assume that $2,000,000 of financial services costs is related to billing and managerial reporting and$1,000,000 is related to payroll and personnel management activities. a. Devise and implement a cost allocation scheme that recognizes that the financial services department has two widely different functions. b. Is there any additional information that would be useful in completing Part a of this problem? c. What are the costs and benefits to St. Benedict's of creating two cost pools for the allocation of financial services costs? General Administration Facilities Financial Services $2,000,000 5,000,000 3,000,000 Salary Dollars $ 1,500,000 Patient Space Services (square Housekeeping Department Revenue feet) Labor Hours Support: General 10,000 2,000 Administration Facilities 20,000 5,000 Financial Services 15,000 3,000 Total 45,000 10,000 Patient Services: Routine Care $30,000,000 400,000 150,000 Intensive Care 4,000,000 40,000 30,000 Diagnostic Services 6,000,000 60,000 15,000 Other Services 10,000,000 100,000 25,000 Total $50,000,000 600,000 220,000 Grand Total $50,000,000 645,000 230,000 3,000,000 2,000,000 $ 6,500,000 $12,000,000 5,000,000 6,000,000 7,000,000 $30,000,000 $36,500,000 Step by Step Solution
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