Financial Management class. Assignment is on: Departmental Costing and Cost Allocation

Use the following information for problems #1-6. St. Anthony's Hospital has three support departments and four patient services department The direct costs to each of the support departments are as follows: General Administration $2,000,000 Facilities $5,000,000 Financial Services $6,000,000 Selected data for the three support and four patient services departments are shown below: Department Patient Services Revenues Space Housekeeping (square feet) Labor Hours Salary Dollars Support General Administration Facilities Financial Services Total 10,000 20,000 15,000 45,000 2,000 5,000 3,000 10,000 $1,500,000 $3,000,000 $ 2,000,000 6,500,000 Patient Services Routine Care Intensive Care Diagnostic Services Other Services Total Grand Total $ $ $ $ $ $ 40,000,000 4,000,000 6,000,000 10,000,000 60,000,000 60,000,000 400,000 40,000 60,000 100,000 600,000 645,000 150,000 30,000 15,000 25,000 220,000 230,000 $ 22,000,000 $5,000,000 $ 6,000,000 $ 7,000,000 $ 40,000,000 $ 46,500,000 #1). Use the information for St. Anthony's. Use the direct method of cost allocation. Assume that $5,000,000 of financial services costs is related to billing and managerial reporting and $1,000,000 is related to payroll and personnel management activities. What is the allocation rate for the Financial Services cost pool allocated based on patient services FEVERES? Hinc Find the most appropriate cost driver. The $5,000,000 of the Financial Services cost is related to 'Billing and Managerial Reporting. The cost driver will be Total Patient Services Revenue. #2). Use the information for St. Anthony's. Use the direct method of cost allocation. Assume that $5,000,000 of financial services costs is related to billing and managerial reporting and $1,000,000 is related to payroll and personnel management activities. What is the allocation rate for the Financial Services cost pool allocated based on salary dollars? Hint Find the most appropriate cost driver. The 'Payroll and Personnel Management Activities' cost of $1,000,000 is directly related to salary dollars. This means the cost driver should be the total salary dollars for providing patient care. #3). Use the information for St. Anthony's. Use the direct method of cost allocation. Assume that $5.000.000 of financial services costs is related to billing and managerial reporting and $1.000.000 is related to payroll and personnel management activities. How much of the $5.000.000 financial senice cost pool is allocated to intensive Care? Hire Use due cost driver you calculated for 'Financial Services- Billing and Managerial Reporting (problem #1) and then multiple that but the Parenr Service Revenue for bensive Care. Create a table it will help #4). Use the information for St. Anthony's. Use the direct method of cost allocation. Assume that $5,000,000 of financial services costs is related to billing and managerial reporting and $1,000,000 is related to payroll and personnel management activities. How much of the $7,000,000 financial services cost pool is allocated to Diagnostic Services? Hint Use the cost driver you calculated for 'Payroll and Personnel Management (problem #2) and then multiple that by the Salary for Diagnostic Services. Create a table e will help #5). Use the information for St. Anthony's. Use the direct method of cost allocation Assume that the hospital uses salary dollars as the cost driver for general administration and housekeeping labor hours as the cost driver for facilities. Assume that $5,000,000 of financial services costs is related to billing and managerial reporting and $1,000,000 is related to payroll and personnel management activities. What is the total of indirect costs allocated to Routine Services? Hint You have already figured out the wo Financial Service Allocation Rates - all we have to do is to calculate the rates for General Administration and Facilities and then apply the rates to the Patient Services Departments. Do one step at a time and create a table. #6). Use the information for St. Anthony's. Use the direct method of cost allocation. Assume that the hospital uses salary dollars as the cost driver for general administration and housekeeping labor hours as the cost driver for facilities. Assume that $5,000,000 of financial services costs is related to billing and managerial reporting and $1,000,000 is related to payroll and personnel management activities. What is the total of indirect costs allocated to Other Senice? Hint: You have already figured out the eso Finencial Service Allocation Rates - all we have to do is to calculate the rates for General Administration and Facilities and then apply the rates to the Patient Services Deperomenes. Do one step at a time and create a table