Direct and Indirect Costs Review the chapter text regarding direct and indirect costs. In particular review the example of freestanding dialys center direct costs (Exhibit 6-1) and indirect costs (Exhibit 6-2). Remember that indirect costs are shared and are sometimes called joint costs or common costs. Because such costs are shared they must be allocated. Also, remem that one test of a direct cost is to ask: "If the operating unit (such as a department) did not exist, would this cost no in existence?" Allocating Indirect Costs Study Table 6-1, Example of Rehab Cost Center Direct and Indirect Cost Totals, and Table 6-2, Example of Indirect C Allocated to Rehab Cost Center, and review the chapter text describing how the indirect cost is allocated. This assignment will change the allocation bases input for A) Number of Visits (Volume), B) Proportion of Direct Costs, an C) Number of Computers in Service. Required Compute the costs allocated to cost centers "Clerical Salaries. "Administrative Salaries": and "Computer Services" usi the new allocation bases shown below. Use worksheet #1, which is attached here and replicates the set up in Table 6-2. Total the new results. AE6-1-1.doc