Question
Exhibit 4 County Hospital Cost Allocation Data Support Departments Housekeeping Direct Cost Space (Sq. Ft) Housekeeping $500,000 8,000 General Administration $750,000 12,000 Maintenance $600,000 15,500
Exhibit 4 County Hospital Cost Allocation Data
Support Departments Housekeeping Direct Cost Space (Sq. Ft)
Housekeeping $500,000 8,000
General Administration $750,000 12,000
Maintenance $600,000 15,500
TOTAL SUPPORT DEPTS. $1,850,000 35,000
Patient Service Departments Direct Cost Space (sq. ft) revenues
Medicine $800,000 10,000 $970,000
Surgery $1,200,000 20,000 $3,600,000
Outpatient Adult $560,000 15,000 $720,000
Outpatient Pediatrics $470,000 12,000 $630,000
Total Patient Service Depts. $3,030,000 57,000 $5,920,000
County Hospital Totals $4,880,000 92,500 $5,920,000
27. Assume that managers want to allocate housekeeping costs to the patient service departments. What is the value of the housekeeping cost pool? (2 points)
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8,000 sq feet
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57,000 sq feet
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$500,000
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$1,850,000
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28. Assume that space will be the cost driver and that managers want to use the direct cost allocation method. What is the total amount for the cost driver? (2 points)
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57,000 sq feet
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35,500 sq feet
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92,500 sq feet
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None of the above
29. What is the appropriate allocation rate for the housekeeping cost pool if space is the cost driver and using the direct cost allocation method? (2 points)
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$5.40 per sq foot
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$14.08 per sq foot
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$8.77 per sq foot
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None of the above
30. Assuming that the cost driver for housekeeping costs is space and using the direct cost allocation method, what is the allocation of housekeeping costs to the Medicine Department? (2 points)
a. $ 87,720 b. $ 54,000 c. $ 140,800 d. None of the above
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